How to restore iPod touch?

Did you connect it to iTunes. You will have to restore the ipod since the entering of the passcode disabled the touch.

1. Make sure you have the latest version of iTunes installed and running before attempting to update.
2. Connect your iPod Touch to your computer.
3. Select your iPod Touch when it appears in iTunes under Devices.
4. Select the Summary tab.
5. Select the Restore option.
6. When prompted to back up your iPod touch's settings before restoring, you can select the Back Up option.
7. Select the Restore option when iTunes prompts you. This is where you will lose all the information that is on your iPod
8. Once the restore process has completed the iPod touch restarts and displays the Apple logo while starting up.

There is also another way but since you did not tell us what computer operating system you are using, it could be confusing to add this.

Hope this works and good luck.