Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.
If recovery mode does not work try DFU mode.
If You Are Locked Out Or Have Forgotten Your Passcode
If you have forgotten your Restrictions code, then follow the instructions
below but DO NOT restore any previous backup. If you do then you will
simply be restoring the old Restrictions code you have forgotten. This
same warning applies if you need to restore a clean system.
A Complete Guide to Restore or Recover Your iDevice (if You Forget Your Passcode)
If you need to restore your device or ff you cannot remember the passcode, then you will need to restore your device using the computer with which you last synced it. This allows you to reset your passcode and re-sync the data from the device (or restore from a backup). If you restore on a different computer that was never synced with the device, you will be able to unlock the device for use and remove the passcode, but your data will not be present. Refer to Updating and restoring iPhone, iPad and iPod touch software.
Try restoring the iOS device if backing up and erasing all content and settings doesn't resolve the issue. Using iTunes to restore iOS devices is part of standard isolation troubleshooting. Restoring your device will delete all data and content, including songs, videos, contacts, photos, and calendar information, and will restore all settings to their factory condition.
Before restoring your iOS device, Apple recommends that you either sync with iTunes to transfer any purchases you have made, or back up new data (data acquired after your last sync). If you have movie rentals on the device, see iTunes Store movie rental usage rights in the United States before restoring.
Follow these steps to restore your device:
1. Verify that you are using the latest version of iTunes before attempting to update.
2. Connect your device to your computer.
3. Select your iPhone, iPad, or iPod touch when it appears in iTunes under Devices.
4. Select the Summary tab.
5. Select the Restore option.
6. When prompted to back up your settings before restoring, select the Back Up
option (see in the image below). If you have just backed up the device, it is not
necessary to create another.
7. Select the Restore option when iTunes prompts you (as long as you've backed up,
you should not have to worry about restoring your iOS device).
8. When the restore process has completed, the device restarts and displays the Apple
logo while starting up:
After a restore, the iOS device displays the "Connect to iTunes" screen. For updating
to iOS 5 or later, follow the steps in the iOS Setup Assistant. For earlier versions of
iOS, keep your device connected until the "Connect to iTunes" screen goes away or
you see "iPhone is activated."
9. The final step is to restore your device from a previous backup. If you do not have a
backup to restore, then restore as New.
This is asked and answered constantly on this forum The forum search bar is on the right of this page as is the more like this section.
Do as the manual says to do and restore the ipod.
If you are unable then type "unable to restore" into the search bar at the top of this page by Support and read the resulting help article.