Hello there propeller74,
I am not seeing in the information you provided that resetting the iPod has been done. Aside from that you have done a VERY good job of troubleshooting the software on the device. From the article How to reset iPod found here http://support.apple.com/kb/ht1320.
- Toggle the Hold switch on and off. (Slide it to Hold, then turn it off again.)
- Press and hold the Play/Pause and Menu buttons simultaneously until the Apple/iPod logo appears, about 6 to 8 seconds. You may need to repeat this step.
If the above steps did not work, try connecting iPod to a power adapter and plug the power adapter into an electrical outlet, or connect iPod to your computer. Make sure the computer is turned on and isn't set to go to sleep.
If you are still unable to reset your iPod, use only one finger from one hand to press the Center (Select) button, and one finger from the other hand to press the Menu button.
When you reset iPod all your music and files are saved, but some customized settings may be lost. Date and time are preserved (unless the iPod reset itself because it had no power and then was reconnected to power). Other customized settings, such as Bookmarks, On-The-Go Playlists, Shuffle, Backlight timer, and so forth are preserved from the last time the hard drive turned on.
All the best,
Sterling