That is usually a sign that moisture has come into contact with the iPod causing it short out and do all kinds of weird things such as turning the volume down. This same problem has occurted with several users who workout with their Nano.
You can try leaving the Nano in a sealed bag of uncooked rice to let all the moisture be absorbed. If that doesn't help your iPod will likely need to be serviced.
I had the same thing happen. Just got off the phone with tech support and I am having to get my second refurbished ipod nano. I had to pay 65.00 for the first one and now it is doing the same thing! Since this one was within the 90 days I don't have to pay another 65.00 but if the next one does it again and it's past the 90 days I have to pay again! The thing is is that my first nano was probably given to some poor chump who's had the same problem and now they have paid their 65 dollars for mine which wasn't fixed. They told me that they do not do repairs on something this small, so I have to pay for a used one! It's crazy! You know if Apple wants to be the best then make your stuff right the first time...and if you don't then don't make me pay to get one that is used and had the same problem! Buyer Beware!!