That is usually a sign that moisture has come into contact with the iPod causing it short out and do all kinds of weird things such as turning the volume down. This same problem has occurted with several users who workout with their Nano.
You can try leaving the Nano in a sealed bag of uncooked rice to let all the moisture be absorbed. If that doesn't help your iPod will likely need to be serviced.
However it may already be too late for that. It wouldn't hurt to also work through the 5 R's of troubleshooting to rule out any possibility of a software glitch/error.