Original post by: Sean Jaatinen ,
Update on my experience. The drive was bad. I sent it back to the service place I ordered it from. They tested it and the drive itself is defective. FYI: with this red X issue you cannot get the iPod into disk mode in order to do a restore. So iTunes is completely useless. Diagnostics mode is the only thing you can try and then run through all the tests in order to narrow down the problem.