I'm having the same problem, but I think mine was caused by a power surge that may have screwed up the firewire connection. What I ended up doing, since I didn't have any of my stuff backed up was taking apart my ipod. I removed the harddrive and pluged it in using another ipod (you could also use a harddrive enclosure). Copied all the music off it and then tried the hard reset. Still nothing. I don't think resetting will solve this problem.
I have read a lot of posts sighting the firewire connector as the source of this problem. Supposedly, the 1st Gen. ipods especially, suffer from a weak firewire connector mount. This is a website I came across that repairs this problem http://www.pdasmart.com/ipodpartscenter.htm.
Good Luck and let me know if you figure anything out.
If you want to try the PC thing I don't think it could make things worse.