Frozen Itouch with multi-coloured horizontal lines

On 1st January 2012 since 3am Sydney Australia time the Itouch now shows 1 cm of pixel thin - multi-coloured horizonal lines.  Pressing the sleep and menu buttons for 30 seconds does not power the Itouch off.
I had recently upgraded the itouch purchased 1 year ago to ios 5.01 - is it related to the upgrade?
Is it related to the date?
Please help....what can I do....all I can think of is to let the battery run flat...

Thanks IIIaass I really appreciate your reply.
When I followed your instructions.  After connecting the Ipod to its syncing computer it did not see it....and I also could not put it in recovery mode - by holding the two buttons at the same time.
...after about an hour of displaying the horizontal lines the battery went flat and the screen turned off and finally showed somed something different - the battery symbol.
I then put it on the ipod dock and it now works properly.
Thanks so much for your help.
In summary if anyone notices:
that the reset buttons don't work, just let the battery run flat (rather than put the ipod on its charging dock)
....and stop playing with the ipod when it warns you the battery is low

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