IPod wont turn on or update after iTunes 7, please help

It's a 2004, 20gb iPod with click-wheel. A friend gave it to me, if I can try to repair it. Apparently it died after installing iTunes 7. The iPod wont turn on or respond to anything. The only time it does is when its connected to a computer. At first iTunes reported that the iPod is corrupted and needs to be restarted. And when it turns on, theres an icon with an exclamation mark and an URL pointing me to Apple's support. At first i tried with various older firmware files and I got the messega that there was an error formatting the ipod. iTunes 7 gave a 1418 or 1429 error at the end of the updating process.
I tried with resetting it, putting it in the disk mode and then erasing and/or partitioning it with Disk utility and it was always the same. I tried unplugging all the other devices when updating, just like recommended. Again nothing worked.
Here comes the peculiar part:
Then I did a complete erase, writting zeros over the whole disk in Disk utility. It took ages and then finally stopped with an error just before finishing. After that I can update my iPod just fine with iTunes 7, I can even name it again and start adding songs(it takes forever for just one song). Even older updaters say its fine. But after unplugging it from the computer its still dead and it still displays the error icon. All that got me so confused.
I find it hard to believe that a hardware error suddenly appeared just after installing iTunes 7 and I am really hoping for any help I could get because I dont want to give up on it just yet. Thanks.

Try:
- iOS: Not responding or does not turn on
- Also try DFU mode after try recovery mode
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings
- If not successful and you can't fully turn the iPod fully off, let the battery fully drain. After charging for an least an hour try the above again.
- If still not successful that indicates a hardware problem and an appointment at the Genius Bar of an Apple store is in order.
Apple Retail Store - Genius Bar

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