It sounds as if the hard drive is in a state that doesn't allow it to be properly used. This would explain why the iPod tells you it is corrupted and why iTunes fails to restore it properly. Does the iPod make a clicking noise when you try to turn it on? Try holding the backplate up to your ear to help you be able to hear it. If it does, that means the armitures in the hard drive are misaligned and can not properly read the hard drive platters (circular platforms that hold the data). This can be caused by dropping the iPod or excessive movement (such as a pocket, etc.) What you can try to do to fix it is holding the iPod in one hand, and making a fist with the other, and hit the side of the iPod a few times with some force but not enough to break it. If all goes as planned, this should knock the armitures back into place so that the hard drive can function properly again. If this doesn't work, you'll need to replace the hard drive in your iPod. For the price this would cost, you may want to consider just buying a new iPod. This method has maybe a 60% success rate; I used to repair iPods as a hobby with a little extra income and this is what I attempted with all hard drive issues.