Ipod wont work till i connect it to itunes,but itunes tells me that i have to remove the password i had before i damaged my ipod,help?

okay,heres the story,i have an ipod touch 2nd generation,two months ago i dropped it in water,up until now it didnt work,for some reason it does now,problem is,my ipod tells me that i have to connect it to itunes for it to work ( i cant do anything with it,when i power it up it shows the power cord going into the itunes logo,thats all it does),but when i connect it,itunes tells me that i have to remove the password i had on it before i dropped it into water, but again i cant go in my ipod to remove it,so i was wondering if theres a chance that i can take my password off by another way then my ipod? if anybody has a solution it would be really helpfull thanks

Try placing the iPod in recovery mode and then restoring the iPod via iTunes.  Fior recovery mode see:
iPhone and iPod touch: Unable to update or restore

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