Hi Brett,
Thanks for your reply. Funny timing actually as I JUST literally fixed it.
I have spent the past 24 hours trying EVERYTHING. I had gone through every step that was possible (some weren't possible as the iPod wouldn't show up in itunes for a restore) and nothing worked. Deleting iTunes, reinstalling Yosemite, Time Machine restores. Nothing.
The problem was with Yosemite 10.10.2. Without realizing it, I was still being seeded beta versions of Yosemite. After the public release of 10.10.1 I assumed I would stop receiving beta versions but that wasn't the case. So, I went to the app store and downloaded/reinstalled the public version of Yosemite that was released back in October, you can install it right over 10.10.2. I then un-enrolled myself from the Apple Beta seed program (https://appleseed.apple.com/sp/betaprogram/unenroll). After unenrolling, I applied all updates (which were public releases since I was not enrolled in the beta program any longer), restarted the computer, fired up iTunes, plugged in the Nano and bam, the iPod mounts as it should and I am able to sync again!
Hope this helps anyone else that may have this issue.