Just fixed iPod stuck in Restore loop

Question

Well I busted my iPod. So I purchased a hard drive for it and installed the unit. All my instructions (gleaned from boards and tutorials) said to connect the thing and restore the iPod. I connect it and it says it is in recovery mode and in order to use it I need to restore it. No surprise, I expected that. I click restore and enter my admin password. It seems to begin the process but then kicks out a warning that says it cannot restore because iPod is busy. I tried ejecting and putting into disk mode manually. I reconnect and the warning says the iPod is corrupted and needs a restore. I go through the whole rigamarole again and it says it is busy. If I leave it connected after the busy warning and click 'OK' then it automatically begins again, saying that the machine is in recovery mode and needs to be restored before i can use it. Same thing all over again...Click restore, admin pass, can't restore because the iPod is busy and so forth.
I tried ditching iTunes and re-installing it. No dice.
I tried erasing the drive with Disk Utility, but the erase failed citing an input/output error. the computer told me that partitioning the drive will eliminate some iPod functionality so I didn't try that.
I tried connecting it to my friend's computer. I got it to toss up a license agreement window for the iPod software (a good sign I guess) but I don't know his admin password to continue. The hope that lies therein is that the license agreement window for the iPod software pops up and that is something that differs from the process on my computer.
I tried going back to my computer and ditching iTunes again and reinstalling an earlier version. No dice. Earlier versions of iTunes will not recognize the library because it was created in a later version and therefore iTunes will not open.
I even tried giving the iPod the old smack in the palm of my hand like some have suggested, but again, no dice.
Any ideas on what needs to happen? How do I convince the computer that iPod is in fact not busy and really would rather restore itself? How does an iPod with literally nothing on its mind become busy and how, if it is, does it become "unbusy"?
(Update: I went back to my friend's computer with him there to enter his admin password. It now does the same thing my computer does and will not bring up the license agreement for iPod software.)

Answer 1

I had this problem today, and I think I figured it out. After multiple tries, and ITunes freezing up, I did a reboot with the IPod connected. I got a window saying that the drive was unrecognizable by the computer. It gave me three choices, to "verify," "Ignore" and another choice, I think it was "OK". I picked "ignore." Then I opened ITunes, it recognized the IPod, and it prompted me to restore again. This time it worked. I think that by telling the IMac to ignore the "drive," ITunes didn't see it as being busy. This makes sense to me, as I enabled the IPod to be used as a drive to store files. If this is the case, I'm surprised Apple doesn't see fit to provide decent documentation for these error codes or fix the problem in ITunes. Hope this helps for you.