Is the fall damage the reason for iPod malfunction?

Problem:

iPod won't play files - I can navigate the menu, but when i click to play a song it just won't play. It just shows the album with the usual time bar at the screen bottom, and stays at 0:00 as long as it's turned on. I've tried the Apple guide.

Also, it won't appear in iTunes while connected with cable. I've sidestepped this a couple of times by setting it in recovery mode, but the problem mentioned above is not possible to sidestep even with an recovery. If it isn't in recovery mode when connected, it won't appear.

I've talked to an Apple repairman, who said it was an unfixable problem. But when he saw a damage on the top of the iPod (a place where it's pushed 0.5 mm in).

Can this be the cause of the problem (since the it's at the top, and the screen is working)?

If it ain't, I'm going to have a nice talk with the Apple Man:)