Just like a computer's hard drive, the drive within your iPod Nano can become corrupt and fail. A corrupted iPod Nano drive is often indicated by a folder or question mark icon on the screen while powering on the device. In most cases, there are a few steps you can take to reset and restore the iPod Nano back to working order. If the recovery methods do not work, you may have a bigger problem on your hands. In such cases, you must contact Apple.
Move the “Hold” switch to the “Hold” position for a few seconds. Move the switch to off. Simultaneously press down the “Menu” and “Select” (centre) buttons for 10 seconds to reset the iPod Nano.
Connect the iPod Nano to the computer via iPod USB cable. Open iTunes if it does not start automatically.
Highlight the iPod Nano in the sidebar and click “Summary.”
Click “Restore” and select “Restore and Update.” This will erase the iPod, reformat the drive and reinstall the firmware. A progress bar will appear on the iPod Nano’s screen indicating the restoration process. Once complete, you will need to set up the iPod in iTunes again.
If your iPod Nano appears to be corrupt even after a restore, you may need to bring the device into an Apple Store for further diagnosis.