Q: When I connect my iPod to iTunes it says storage overload but on iPod it says 8 gb available

It sounds like you have iTunes configured to automatically sync when a device is connected and that you have iTunes configured such that it is try to sync more media to the iPod than storage space available on the iPod.

Check your sync settings:

iTunes: Syncing media content to iOS devices and iPod       

https://support.apple.com/en-us/HT201253

Try syncing using the manual method                

Managing content manually on iPhone, iPad, and iPod

https://support.apple.com/en-us/HT201593

Does the error message really say "storage overload"?

Restore the iPod via iTunes & Setup as New & Sync your Backup & use this will Fix your Issue