Hey I'm just reading your question and you were holding the home button while plugging the ipod into your computer, I'm just wondering if you have done the following as well. It seems like you're on the right track.
1. Connect your iPod to your computer with the USB cable.
2. Turn the iPod off completely (hold Power until it shuts down).
3. Hold both Power (top button) + Home button together for 10 seconds.
4. After 10 seconds, release the Power button but keep holding Home for about another 10–15 seconds
5. The screen should stay completely black (not Apple logo, not recovery cable screen).
If you see the Apple logo, it booted normally, try again.
If you see the “connect to iTunes” logo, that’s Recovery Mode, not DFU (still usable, but not always for deep restores).
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