i just fixed a friend's ipod a few days ago with a similar problem, somehow, after leaving it connected to the computer, for an hour or so, it showed up and itunes recognized it, and i restored the firmware with itunes, and now, it works like a charm, i have been testing it for a few days, before i give it to him, but it seems to work fine. try booting it while holding "Center" and "Previous" that will boot it in to diagnostic mode, where you can check the firmware for issues. if you try this, you might find a problem, so you have a reason to open it, because these are a real pain to open, and you damage the case when you so it almost every time. Can you try to connect it to an iHome or some kind of dock other than a computer?
Here were my iPod's symptoms:
Showed "Connected" when plugged in, but not recognized by the computer
When unplugged, it would show the "Ok to disconnect" thing, than reboot shortly following
Showed 0KB Total, 0KB remaining, on the iPod itself
are your symptoms similar to these?
restoring the iPod fixed it for me, but the trick is to get itunes and the computer to find it, try to go into disk utility (if you have a mac) or disk manager (windows) and see if the ipod actually shows up