After seeing
appear on the screen of my Ipod I've buried it in my mind. Apple suggested a "serious hardware issue". In a desparate search on google I've found the straw, grabbed it and it worked. So if this ever happens to anyone - do not, I repeat, do not junk your Ipod. Brute force always wins.
Here's the fix Note: shaking the Ipod won't help, the hard drive has a padded mounting and is somewhat shock-resistant.