Ipod will not scroll and already restore and

The ipod scroll wheel is not too hard to repair. A good source for thepart would be ebay. But There is a stepby step guide toothat explains how to replace it : iPod repair. There are also third party iPod repair companies that do it for you.

i assume that what you mean is that the scroll wheel is not working; you cant select different menu items with it.

this is problem a hardware, rather than software issue (e.g. physical damage)

you have some choices at this point:

1) try and fix it yourself. this can be difficult
go to ifixit.com
they have both the parts for the repair, as well as the instructions on how to do the repair itself.

2) send it off to apple to fix
this will be very expensive and slow, i don't recommend this.

3) sell it, and buy a new iPod.