Ipod is disabled

Try this connect it to PC
While connected do a reset
It will bring it to it's original settings (Hopefully)
To do the rest while connected
1: Toggle the Hold switch on and off. (Slide it to Hold, then turn it off again.
2:

1. Toggle the Hold switch on and off. (Slide it to Hold, then turn it off again.)
2. Press and hold the Menu and Center (Select) buttons simultaneously until the Apple logo appears, about 6 to 8 seconds. You may need to repeat this step

This should start itunes if successful and ask if you want to restore to factory...

This assuming you have a newer ipod if it is older go here and do what I say but use a different reset while connected http://support.apple.com/kb/HT1320