I know this topic might be old, but this recently happened to my friends ipod nano, and it wouldn't turn on and obviously the click wheel was disabled. Seeing I am a "computer geek," according to him he asked me to fix it.
At first i thought it was Firmware, so I backed up all his music and restored it. That didn't work.
So I browsed the internet for ideas and game along this forum and various other sites that had majority of the same ideas. I didn't want to open it up because it wasn't my ipod, like one site says to do. So at school i popped the cap off the hold switch, with my finger nail, or you could use a pen. I got something sharp like a pin, pen or a paper clip and moved the switch into the off position and then clipped the cap back onto the switch. The ipod now works fine, the hold switch still works and I didn't have to open it. Just flick off a flimsy cap and then put it back on.
I hope this can help someone in the future, who is searching through Google. While there ipod is busted.
Weirdstranger.