What do you mean locked out? Do you mean there is a passcode lock on the device and you have forgotten the passcode?
If so, all you can do is restore the device. If you have a backup you can restore from that (although if it also has the forgotten passcode, it will also restore that too). If you do not have a backup in iTunes from before setting the forgotten passcode, you can only restore as new, and yes, you will loose all content on the device.
Only if the screen allows you to enter the passcode.
Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.
If recovery mode does not work try DFU mode.