Compress the top bezel a bit with your fingers (maybe hold the ipod in one hand
but with the fingers at the top and bottom, instead of on the sides). Try to
operate the Hold button. Does it work? If not, you may need to pop off the top
bezel (it is held in with a mild adhesive - see the Step-by-Step Guides for
pictures and tools) and check that there is no glue/dirt/muck on the contacts.
If you do it carefully, you should be able to push the bezel back in and the
glue strip should hold it in place. Try the hold button again. If that does
not work, I don't know what else could be wrong.