If this system is designed like more recent car audio systems, which also connect to iPods (and other devices) through a built-in USB port, the audio system does the song playing. The iPod is just there to act as a song storage device, not as the music player. You can probably also connect a common USB flash drive with song files to that USB port, and the receiver accesses it in the same way.
Therefore, seeing "OK to disconnect" on the iPod's screen may be as designed, when the receiver is not accessing the iPod's storage for song files. What happens when you press the "special iPod access button"? On the receiver's interface, look for controls to start playing songs stored on the iPod. OR since this is a receiver, it probably has a source selection control, to choose the audio source. If so, pick the one to use that USB port as the audio source.