iPod ipod shuffled it's last

My ipod shuffle isn't working and flashes green and orange when a button is pressed (meaning error) , this is what i have tried to do to fix it,

Reset
Recharge
Restore (shows following message)


Does anyone know any other shuffle tricks which might fix the problem?
I didn't do anything to cause this, like drop it etc. It seems to be a software problem and the battery seems fine. Maybe a memory chip problem?