To recover use of the iPod without fixing the Home button:
- See my first reply on page 1 in this discussion for how to place the iPod in Recovery mode win a computer app.
https://discussions.apple.com/thread/6568510
Turn on W/O Buttons
or
If you previously turned on FIndMyiPod on the iPod in Settings>iCloud and wifi is on and connected go to iCloud: Find My iPhone, sign in and go to FIndMyiPhone and use Remote Wipe to erase the contents of your device. If you have been using iCloud to back up, you may be able to restore the most recent backup to reset the passcode after the device has been erased.
You can also wipe the iOS device by installing the FindMyiPhone app on another iOS device and using that app to wipe the device.