I'm thinking that basically what happened is that your iPod was half way through installing the new update when your computer shut down, so right now your iPod only has half of the firmware. I'm sorry, but I don't really think there is a solve. (Unless Alvin has something about Quickpwn).
When's the last time you sync'd with iTunes? All your high scores are safely contained in the automatic backups iTunes creates every time you sync. If a hard power cycle (home+power button) boots up in recovery mode again, then just restore in iTunes, and when it finishes, iTunes will ask you if you would like to restore to a backup, and present you with a list to choose from. Summary: as long as you've sync'd recently, you're fine.
I've been in that situation before. I just messed around with holding the sleep and home buttons different lengths of time. For example I tried to follow the steps to put it into restore mode (even though it was already in restore mode) Once I did that I unplugged it from the computer and tried to hold the sleep button for about 10 seconds. Then I tried holding sleep and home for 10 seconds. Just different combinations. Eventually I got it to work. Hope you get your iPod working!
OK Well, I couldn't find the youtube video that I followed, but I recall that it just involved the first step of quickpwn. I'll keep looking for it, but for now, try downloading quickpwn, turn off your ipod, plug it in, follow the first step of quickpwn, dont jailbreak, and see if it works. =P You got nothing to lose lol *Edit couldnt find a youtube video, but I found a post from macrumors. "Heres a way thats a 100 times easier. Download quickpwn 2.2 it can recognize your phone in recovery mode http://www.downloadtaxi.com/d/1246829657/ Plug your phone in follow the prompt that tells you to turn off the phone and when you hold the power button to turn it on, presto, out of recovery mode. Takes a whole minute and a half. "
Dont restore! I'm pretty sure there's a way, developed to help with jailbreaking. Google around and I'm pretty sure you'll find theres a tool that will take it out of Recovery/DFU mode\ edit: took me 30 seconds. see if this works. http://www.ipodtouchfans.com/forums/showthread.php?t=32564
GOD BLESS YOU. It worked perfectly, I'm pretty damn happy someone found a working method! Thank you, thank you, thank you. First thing I'm doing is backing this thing up Thanks to the rest who tried to help as well
