I was having the same problem and found an answer that seemed to work....
Try forcing the ipod into diskmode.
Hold down the menu and middle button till you see the apple logo. Then hold down the middle button and the play button. You should get a check mark on the screen.
Connect to computer and try to restore it.
one more thing... once you're finished and you want to get your ipod out of disk mode...
- Hold down the center button along with the menu button and then your ipod will turn of
- After that step has been completed and your ipod is switched off you turn your ipod back on but press the play/pause button so that it switches from disc mode to non-disc mode.
- Well then your ipod is back to shape and you can carry on listining to your music!