If none of the 5 R's of troubleshooting are able to solve the problem, the issue is hardware related, meaning you'll need to have the iPod serviced or replaced. The LCD screen may be burning out.
http://www.apple.com/support/ipod/five_rs/.
You can choose to have Apple replace the iPod for a flat fee or send it to a third party service to have them swap out the LCD for a new one.
http://www.apple.com/support/ipod/service/prices/
B-rock