Hmm. It sounds like the port for the headphone plug has gone funny. What might have happened is the prongs that fasten to their section of the jack have become loose, and are not making proper contact. If you move the ipod, it can cause the just touching prongs to lose contact. They can either fully lose contact, causing the ipod to think the cable has been removed, or it has a tiny gap, causing sparks to leap across, obviously ruining your music. Try replacing the headphone jack and let us know how it goes.