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If you left it sitting in the box "for a few years"...then that's why. The battery has to be used to stimulate the "memory" of the battery. If it was charged once and never used again, then of course it is going to have a battery issue.
You shouldn't leave a broken lithium ion battery on charge for a long time, it could lead to potentially even more problems. Lithium ion batteries are extremely powerful for their size, but when not properly handled, they *could* start a fire.
If you take the iPod to an Apple Store, they might be able to change the battery for you for a fee, but that's given there are absolutely no other damage done to it. I don't know if they'll be able to tell just by looking at it.
You can save a few bucks from what Apple charges by getting replacement battery from third party vendor, such as:
They offer a replacement service, but you can also choose to install your own battery. As a forewarning, replacing a iPod Nano battery is not easy, given such a tiny space to work with, and how the iPod Nano is sealed.