First off, you need to get the iTunes application from apple setup on your computer and have it ready an updated
On your iPod, hold down Select / Menu to reboot the iPod
As soon as the Apple logo appears again, hold down rewind / select until you see a backwards apple logo (might take time)
You are now in Diagnostic Mode. It will test the RAM and ROM, and if ok it will ask you to HIT PLAY TO CONTINUE
In the next menu, use the FF (Fast Forward) key to advance to the DISKMODE entry
Hit Select. Your screen should show the "Do Not Disconnect" msg. Connect it to your computer with iTunes running. It should recognize your iPod now. Use it to restore to factory settings.
You will loose all your songs/data, but your iPod should be ok next
Try not to use your iPod without iTunes. Windows cannot handle iPod right and might damage it if you use it as a flash drive from the My Computer screen
If this doesnt help you, send me a msg and i will try other solutions, but this should work Enshalla*