Ipod looking for passcode when resetting to factory settings. How do I get this passcode?
Passcode for what?
What exactly are you doing when it asks for the passcode?
Likely this is the solution:
Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.
iOS: Wrong passcode results in red disabled screen
If recovery mode does not work try DFU mode.
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings
Retrieving data ...