I had this problem just after i installed Panther. The iPod would show the "OK to disconnect" tick, but not go to the no entry sign, nor mount, nor appear in iTunes. I plugged the iPod into another machine, still running OS9, and it showed up fine in there.
So, i thought, why not try it in Classic in Panther? I installed iTunes 2.0.4 (you can still download it if you hunt a bit.... Cnet?...), plugged the pod in, and Voila! - There it was in my Classic iTunes and on my desktop.
Worked fine in Panther (10.3 - i've not done the update yet) the next time i tried it. (So, having thought about it, i suppose a restart may have been all that was needed.... You did try that, right?)
Since then it has failed to mount in Panther once, but reappeared when i unplugged/replugged the firewire lead at the iPod end. My iPod is a 2nd Gen 10GB, just in case that should turn out to be relevant.
The Void