If your iPod only works correctly when connected to external power, then it's very likely that the battery has died on your iPod. You cannot overcharge the battery has the other poster has suggested.
The monochrome non animated battery icon you see when you connect the iPod to the computer means that the battery is discharged.
There are things you can try here.
My iPod won't turn on.
iPod battery doesn't charge.
If nothing helps, you should send the iPod for service.
You can arrange online service here.
Service request.