restore not working

I have an ipod touch 4 which I got this past valentine's day. I use it primarily to listen to internet radio. I was having trouble connecting to the internet and so I tried a hard restart (home button + power button). The screen changed to a usb cable connect to itunes thing. I tried connecting to my windows vista machine first since that is where my itunes account is. I kept getting a message about network connection timeout. I tried disabling all security programs (virus, spybot, firewall) but it did not help. I tried apple's suggestions of making sure that my os is up to date (it is) and a fresh restart. Neither helped. Next I tried connecting my ipod to my macbook pro. I have the newest version of itunes on it. When I tried to restore my ipod on that machine I got a message that my ipod is not eligible to be restored (what?). Does anyone have any ideas on how I can fix my ipod? I live pretty far away from an apple store (about 70 miles) so I'd like to fix this on my own if possible. Thanks for the help. ;_;