At this point your best option would be to replace it with a newer model, and something that has a full warranty to cover these issues. I purchased mine from Swizzle, and I am so glad I did. It came with a full one year warranty and everything. You can buy iPod, iPad or iPad Mini http://swizzleworld.com/
Sorry you are having this issue, but I would definitely go with the iPod Touch 5th Generation. http://www.swizzleworld.com/buy-apple-ipod-touch-5th-generation-online.html