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This happens quite often but does not necessarily mean that your iPod needs service.
Launch itunes first, (not by plugging in ipod and allowing to launch automatically.) Then, plug in ipod. After you see it load into itunes, you can use the ipod restore function. You'll lose your music but you it will restore all of it after it resets.
This is often the result of a corrupt file system or a dead/dying internal iPod hard drive. The way to eliminate the file system as the cause is to do a RESTORE. It is probably not showing up on the computer in iTunes, so you need to try to force it into disk mode. To do this, follow the instructions below:
1) Toggle the HOLD slider switch to ON then OFF again. First slide over you will see orange, then slide it back to cover the orange in the hold slider.
2) Repeat what you did by holding down the menu and select buttons and when you get the Apple logo, IMMEDIATELY let go and hold down the Select and Play buttons.
3) You SHOULD see a check mark on the screen and along the top of the screen should be the words, "Disk Mode." If that is there, plug in your iPod to the computer and wait for iTunes to startup.
4) In iTunes, select the iPod and then just click on the RESTORE YOUR IPOD button to reinstall the original software (you will lose your tunes stored in your iPod, but you should have them on your iTunes anyway).
If none of this works and you get the nasty sad icon again, it is most likely the hard drive or another hardware issue. My advice from here is to check with the following company and have them do a FREE diagnosis and quote for repair. Just go to Rapid Repair at this URL: http://www.rapidrepair.com/
Good luck and I hope this helps!