maybe we should start from the beginning ;-)
what iPod touch generation do you have ?
the first generation had no volume control "hardware" - it was all software controlled - the frist generation had also no build in speaker.
and if someone opened it and wasn't careful enough - the little tiny spring (that is between the screw and the connector)is gone than you can't use the hold/power button - the spring is the contact
but first of all - we need to know what iPod touch generation you have - but it sounds for me like a first generation with a broken spring - and if so - there is a possibility to fix it, the "long way" is to solder a long wire on the point were the spring was to the point where the power button contact is.
the better way would be soldering a "cut to fit" spring from a lighter or pen onto the spot were the original spring was.
but it's not that easy
here is the link to the iPod touch 1g guide