I'm starting to have an issue with the battery life on mine too. It's dying on me after just two hours of usage. Even if I just take it off the dock, by midnight (even with no usage during the day) the iPod will be around 20% left. I've had mine for about two years and in those two years I used the hell out of it.. So I'm just guessing the battery is no longer any good.
If you find a fix or a cheap battery placement, let me know please.