iPod Restoring iPod - tricky case

It seems I have really messed up my iPod! Apple's support pages don't have any solution to my problem so I've come here.
When I connect my iPod to the Mac, there is absolutely no detection - neither iTunes, nor Finder can detect it. The disk of the iPod is however detected in Disk Utility. I think I may have messed up the permissions of the disk, so it isn't "viewable". But, clearly there is an amount of "invisible detection", i.e when I disconnect it the Mac will display warning.
I believe the solution to this is restoring the iPod to factory settings. But, this isn't possible, as it can only be recognised in Disk Utility. Should I erase it at Disk Utility, and load the iPod software afterwards? Please advise.

Thanks for the help. It is now into "disk mode", but it still isn't detected!
Finder, and iTunes have not detected it, but Disk Utility detects it, as before.

OK - I think I'll go ahead and erase it. But do you know which volume format a regular iPod on the Mac should be?

Thanks for your help, I'll restore it now.