I have a fourth generation i pod nano and the same things happened to me. I could only work my click wheel when it was plugged into my computer or my ipod dock. I reset it a million times and restored it, that also didn't work. I literally plugged my usb cord into the ipod and didnt even plug it into anything and that got it to work (but still wont work if I unplug it). I'm not sure how long that will last but ya thats the only thing I have found to work.