My friend bought and ipod touch at a pawn shop but it had a chip in the screen and the speaker was broken. He took it to an Apple store and they pulled up the unit and told him it was covered for another 300 days, even though he wasn't the original owner. They swapped it out right there for him. I thought that was pretty good service.
You could always threaten to arrest your brother for vandalism until he gives you money for a new ipod.
Just take it or send it to apple. As long as its under warranty they will fix it or replace it. My uncle got something under his screen and they fixed it right then and there when he went into apple.
