Q: This IS NOT working. iPod disappears from iTunes but still appears on the desktop and the iPod still displays "Connected Eject before continuing."

Have you tried dragging the iPod to the trash icon to eject it from the Finder as well?

Safely disconnect iPod

B-rock

Is the enable disk use option ticked from under the iPod's Summary tab?  If so, disable it unless you manually manage the iPod's contents in which case you can't.

This will prevent other applications from interacting with the device.

B-rock

I'm having the same issue with a 5th Generation 80GB iPod.

I've had this probablem for months.

I'm running Lion now, still an issue.

I can "eject" out of iTunes, but it locks up the finder and can't be unmounted.

You may want to check your iPod's Hard Drive's health using this instructions and information in this older post by another forum member turingtest2.

https://discussions.apple.com/thread/3784647?start=0&tstart=0

B-rock