Try this and see if it works "I've been reading thru different posts and this seems to be a recurring problem and needs to be addressed by apple. the board/clickwheel after a lot of use loosens up and creating some form of unstable contact, a solution i found is by adding a firm backing to it. i did this by inserting a piece of thin plastic (thin old credit card would do) between the board and the aluminum casing on the bottom end of the iPod. tried this with 2 of my iPods and it worked. of course you need to take the bottom plastic cover and the aluminum connector support with the 2 screws first" http://www.ifixit.com/Answers/View/5090/... Since your click wheel still functions I assume that this is caused by the above described issues. Put a backing on it to support the clickwheel
Good luck and let us know how its going....