Ipod 5G will not hold charge after 1.3 update

using itunes to update my 5th Gen Ipod to v1.3 last week, I am now unable to get the ipod to hold a charge.
when connecting normally, displays the message "please wait - very low battery"
and every so often it will attempt to reboot showing the apple icon (no backlight) but then goes back to the message again.
using the other suggestions to get to disk mode, itunes and Windows will recognize it, allowing it to sync.
When connected to wall adapter, it shows the fully charged symbol in the center of the screen.
Able to play songs/video only when connected to wall charger or car charger.
as soon as I disconnect it from a power source/usb, the battery indicator will quickly go down.
-Win XP platform
-tried 2 alternate computers with good USB ports
-directly connnectd to USB (no hubs)
-tried the select-menu / play-menu combination (discussed in other topics)
-able to get ipod to sync with itunes only by going into disk mode
Former discussions indicate possible battery problem.
My concern is that it conveniently happened immediately after an update.
Therefore, leading me to think it has to do more with the update confusing the ipod's battery memory.

I had my iPod on my alarm clock today playing music and decided to try something different to get it to work..
I put it on hold before taking it off the dock. When I took it off, it showed a full charge. Skeptical, I turned it off and back on multiple times and still it showed a full charge! However, when I reset it using the middle & menu buttons, I saw the same low battery image and now I'm back to square one.
I know I'm probably going to have to buy a new battery, but I really don't think any of us should because this was obviously an error on Apple's part and if anything THEY should be the ones compensating for a new battery. I'm going to avoid buying a new one until I hear word from them about this because it's not right at all. For now, I'm going to have to stick to listening to it on its dock or with my car charger.

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