8Gb Touch 2nd gen problem. Only showing connect to iTunes screen and not letting me past that as I have a password - Already reset and it just loops back to the same screen with the same problem

I have an iPod Touch 8GB 2nd gen and it's only showing connect to iTunes screen and not letting me past that as I have a password - Already reset and it just loops back to the same screen with the same problem.
Any idea what I can do to fix this?

you can connect the iPod to iTunes in recovery mode:
Hold down the Home button and the Power button simutaneously, until the screen goes black and the device turns off.
Now let go of the Power button, but continue to hold the Home button. Your iPod Touch/iPhone should have turned off and the screen should not be on.
After around ~10-20 seconds, you will hear a noise (beep/ding) from your CPU as if it had just recognized a new hardware device
and restore it to default settings, in order to remove your password (or just remove your password directly from the iPod touch, in order to sync with iTunes)

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