See Troubleshooting here > http://www.apple.com/support/ipodclassic/
If no joy...
Then a Visit to an Apple Store or AASP (Authorized Apple Service Provider) is required...
Be sure to make an appointment first...
Had the same thing happen to me. Took it to the Apple Store today and was told there's nothing they can do other than to sell you a new iPod. Which is what they did. There's really nothing they can do to try to fix it? No hard-drive replacement? Nothing? Can't say I'm happy about this. Only had it for a year and a half.
this might sound funny but try it becuase it worked for me.
i had the same red x in a circle, and i searched online for solution, and found this solution,
so i combined a couple and i did it my self and worked.
this what you should do:
(make sure your somewhere quiet first, for step 3)
1. hold the select(middle button) and menu till it resets
2. hit the left top (the side with the luck key) a few times semi hard (not so hard to break it, but hard enough to move back the pin or the reader of the hard drive in place) on a hard surface, i did it in a wooden one.
3. listen closely to your ipod, it makes a little noice. kinda like old modem or something, youll know when you hear it. mine worked the first time so i dont know how it sounds if it doesnt work, lol. but you might have to try it a coe times. but make sure you hit it hard enough.
4. watch your ipod come back to life
let me know if you have any question..