Hi @ironsheep
The internal battery is expanding causing the screen to lift off the iPod frame. This is not an easy replacement but if you have a [product|IF145-435-2|basic tool kit] and a [product|IF317-003|quality soldering iron] it is possible to complete successfully.
Here is a [product|IF310-000|replacement battery] and the [guide|45222|guide to get you through] (battery at Step 22)!