UPDATE:
After taking the ipod to my nearest(2 hours away)Apple store I can say Apple has a problem they are not confessing to. I was summarily brushed off by the Apple Concierge (asked all the questions you would expect, "Did you reset it? Did you reset your network settings? Did you restore it....you poor, poor man.) I was able to be seen by the APPLE GENIUS! The Genius asked what the problem was, took down the info, looked at the greyed out wifi and said "This will require an exchange." I was amazed. I asked if it was hardware or software and he replied "It's a known software issue." I said "Not one anyone is mentioning or sending out notifications about." His reply was, "No, it's not." I COULD NOT BELIEVE MY EARS! So people of ipod, iphone...if your wifi is dead, go to the store, relate my story and get your exchange!!!It's NOT repairable. I will gladly provide more details to anyone that desires them. GOOD LUCK!