My 5th Gen iPod touch does not keep time and the bluetooth will not turn on. Full restore did not fix.

Recently my 5th generation iPod Touch stopped keeping time. As long as the screen stays on, it will stay accurate, but once it "sleeps" the time reverts to the last accurate time it had. If I go to Settings>General>Date&Time> and turn Set Automatically off and on, it will catch up, but just for as long as the screen stays on. Not too friendly for battery life that way. Also, maybe unrelated, the Bluetooth function will not turn on. When I try to turn it on, I just get a constant spinning wheel.
I have tried everything from a simple restart to a full device wipe back to factory default. No change. I took it in to the Genius bar this afternoon. They tried a diagnostic and another wipe. Then they said they didn't know and I could pay $150 to replace it. Not a bad deal, but not what I wanted to hear.
Any ideas?

All I can suggest is
Try DFU mode and then restore again to factory settings/new iPod              
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings
If still problem that means a hardware problem

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