After Restoration it says the device can not be found..please help.

Have you rebooted the computer?

What is current status of the iPod?

- Reset the iOS device. Nothing will be lost

Reset iOS device: Hold down the On/Off button and the Home button at the same time for at

least ten seconds, until the Apple logo appears.

- 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