Are you able to connect it to iTunes when you plug it into your PC or Mac via USB? If not, try manually forcing the iPod into Disk Mode using the instructions in this Apple support document.
iPod 20GB 3G was displaying same message:
www.apple.com/support/ipod with a sad iPod on the screen.
It was impossible to put it in disk mode.
I then accidentally dropped it on the floor (oops!).
I was able to put it in disk mode after this and my iMac was able to recognise it so I tried to restore it in iTunes.
However it gave me the message 'Unable to restore iPod. It seems to have been corrupted (error 1429)'.
I am now trying a restore using Disk Utility.
Any other ideas should this fail?