You may want to start by removing the existing glasss and digitizer assembly first, inspect the connectors thoroughly as well as the connectors on the ipod logicboard. if possible, use a clean and dry tooth brush to first brushing it dry. If it still looks dirty, then clean it with isobutyl alchol. Then brush the surfact one more time, making sure that the connector surface is very nice and shiny. Wait for it to dry thoroughly before reconnecting because alchol does have a large water content.
Reconnect and try it again. if that does not work, then buy a replacement digitizer plus glass from ebay and install that one in. That should elimnate any posibility that the logic board digitier control module may be defective.
Do check iFixit for instructions on how to remove your existing digitizer. If is fairly straight forward.