I couldn't find the page from apple for the 3rd gen.
Usually just holding the menu and play button together for 5-10 seconds does a factory restore.
From what I've read online, the 3rd gen should only sync to iTunes using a USB cable. Is there a way to try that?
EDIT: Found the original user manual. It says to toggle the hold switch before holding the menu and play button.
http://manuals.info.apple.com/en_US/iPodDockConnectorUserGuide.PDF