yes it realizes t is there it says it needs to be restored but i cant restore it because of some network problem but even when connect the pod to itunes it doesnt turn back on. i know its on though because if it wasnt itunes wouldnt regonize it its just the screen that wont turn on.
I am having the same problem, while upgrading to iOS 6 in iTunes. stayed in recovery mode all night. Somehow, it let me start from scratch i.e. set up as a New iPod Touch 4, but did not restore from iTunes backup. shows error.. iTunes no longer recognizes the iPod. Please help me..