Restore loop (being prompted to restore again after a restore successfully completes)
Troubleshoot your USB connection. If the issue persists, out-of-date or incorrectly configured third-party security software may be causing this issue. Please follow Troubleshooting security software issues. .
Next try placing in DFU mode and then restoring.
Then try restoring on another computer.
Last, make an appointment at the Genius Bar of an Apple store.
If your iPod is stuck in recovery mode, DO THIS: (ON Screen USB pointing to a CD with a Music Note).
1. Make sure your iTunes is up to data, if not re-download itunes.
2. after re-installing ITUNES, plug your ipod via USB into your computer. ITUNES will automatically pick it up and a pop up box will probally say that your iPod stuck in recovery mode would you like to restore?
3. Click the restore tab.
Note - If ITUNES if out of date, this will not work.
Note - Do not do this over WIFI
Note - Do not interrupt the restore
Note - If you did not make a previous back up, your IPOD will restore back to the factroy settings.
All this happened to me, fortunately I made a back up. I hope this helps.