Okay, this worked but to clarify: start with itunes closed and the ipod powered off. Without turning it on, hold down the home botton and keep it pressed while you plug it in. itunes should open automatically and ask you if you want to restore it. release the home botton and click restore. make sure you are connected to the internet as itunes will need to download the current software. from there it is straight forward as to reinstalling your songs and stuff like a new ipod.
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