IPod Touch 2G 32GB stuck on Apple screen, unable to restore

My iPod Touch froze a few days ago. Powering off/on did nothing (I can't turn off using just the power button, have to use Home as well). Hard reset does nothing - it just sits on the Apple screen, without even a progress bar. I let the battery run out, and have charged it again, with the same results.
I was trying to avoid connecting it to iTunes (a whole other story, basically the laptop with my existing iTunes library bluescreened, I thought I had it all backed up but turns out the apps and backups aren't there, we're working on data recovery) but figured that was my only option to restore. Not sure whether the fact I've never connected this iPod to this PC is a problem, but it is not recognising it at all. Not just in iTunes - it's not even registering as a USB device. I have tried forcing it into Restore mode to get it recognised, but it just goes back to the Apple screen and sits there again.
Any ideas? (It's long out of warranty).

More Troubleshooting Steps For Your Consideration:
I was able to restore back to iPhone OS 2 by using a laptop that had not been synced with my ipod touch previously. When I did the DFU with it, iTunes downloaded OS 2 and it worked.
Then I went back to my iMac and proceeded to install OS 3.1.3 and that seemed to work ok too.
I've been getting the white apple logo of death, however, when I try to sync applications. All seems well, but as it is finishing the ipod touch reboots to the White Apple Logo Screen and stays there. iTunes seems oblivious to this taking place.
During my second rebuild starting with OS 2 and then updating to 3.1.3, it worked again. When I tried to add apps, I only put on a dozen. That worked too. I did get the White Apple Logo Screen of Death once again and I did the third sync to get the rest of my apps in place.
I'm on the third rebuild from version 2. I'm going to try to use an old file I have of 3.1.1 instead of 3.1.3. Also, I'm going to add one application per sync. At least this way I might be able to find out if it is a specific app that is causing the problems.
In my further research, it appears that this bug has been in place since the early days of iPhone OS 2.
All told I've spent over week with my computers tied up working on this problem. I think it would have more cost effective to just buy a new iPod. (I'd rather wait for the 4G version this fall!).
Just in case anyone else has been having issues, that is where I'm at. I'll let you know if I figure this issue out in more detail.
Thanks,
Paul

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