My ipod has stopped connecting to my wifi home network

My ipod touch has stopped connecting to our home wifi network. It has connected successfully over the past 14 months and the router settings/passwords have been the same since they were set up years ago. Today it has stopped connecting to wifi networks. We have two wifi networks (two different routers) and it has stopped connecting to either of them. no mater what I try I get either an "invalid password" or "unable to connect to network" error. I kmnow the password is correct as it hasn't changed since the routers were set up a cuple of years ago, I have loged onto teh routers and verified the password is still the same. I have

1. Reset the ipod network settings (under Settings/general/reset) but the ipod still won't connect
2. Re-entered the correct wifi-password (case sensitive) but again no joy (tried both wifi-routers)
3. Disabled wifi authentication (WEP) on my router but still can’t connect to the router (re-booted router and ipod before trying)
4. Set up my phone as a wifi network but the ipod refuses to connect to it also.
5. Updated the ios to the latest version (and repeated all the above steps) but still can’t connect
6. Changed the SSID of one of the home routers and disabled wifi authentication (WEP) but still can’t connect to the router.
7. I have restored the ipod to factory settings (on the ipod under Settings/general/reset/ResetAllSettings, and under itunes Restore.Ipod) but it still can’t connect.
8. I have restored a backup from 6 weeks ago and again it doesn’t connect to any wifi

• I set up my phone to share its internet connection via bluetooth and the ipod was able to connect tothe internet via this.
• When I set the phone to share it's internet connection via wifi - while the ipod is connecting I can see 1 user connection on the phone but then it disappears while the ipod remains still trying to connect.

We have two other ipods in the house and they connect to both routers without any problem. Two computers and two mobile phones also connect to the routers without any problem. I have checked and am not running out of devices on either wifi network.