"itunes cannot connect to the ipod because it is locked with a passcode" - help, please. i have tried everything. i have restored the ipod (touch 2g). the battery is charged. latest itunes running. no other externals connected except mouse

itouch is frozen. itunes keeps giving the message "itunes cannot connect to the ipod because it is locked with a passcode". i cannot enter passcode b/c ipod is frozen. (stuck in circulatory heck) I have read & tried nearly everything. restored (tried to) the ipod. latest version itunes. no externals plugged in except mouse & keyboard. connected the ipod with itunes closed & opened while holdng the home button. (this is an abbreviation of steps - i've followed everything to a T ). restarted the computer numerous times. cable is good. can see that the computer sees ipod in devices in control panel. itunes will not recognize that my device is in recovery mode. as far as i can tell - i also did all of the steps for DFU (not sure if i'm remembering those initials correctly, but did do steps correctly - many, many times) any help appreciated. windows 7