iPod leaked black/dark brown fluid, appeared as if on fire?

So in full detail:

I used my iPhone charger to charge my iPod the precious night, I woke up to a

Horrible smell, my iPod was leaking this black, tiny or brown fluid, but it dried up

And stuck to my pillow and blanket, the sides were chalky black

Like it was on fire? It won't turn on and my dad wrapped it in a

Piece of paper and is going to properly recycle it

I got it maybe 1-2 years ago and it's a itouch 4g.

The liquid got under the screen and appears the screen is cracking?

I have no history of dropping it on fire or dropping it at all

It was my prized possession. I have no intentions on saving it

But would just like to see why that happened?