Ok so now im going to see if I can fix it.
Problem: It droped and hit concrete
Symtoms: worked for a little while then it went all screwy (keep skipping through songs, etc...then it would work for a minute or two. Finally I ended up reseting it and the folder with the "!" appered and I knew i was fucked then.
Now this leaves me with a couple options. I can buy replacement parts on ebay. Im looking at the logic board right now....what do you guys think the chances are it is the logic board?
I can take the iPod apart no problem but with the (!)Folder, Im not sure if its a harddrive issue or a logic board issue.