I was attempting to replace the LCD in my 2G iPod Touch, and now my iPod has the same issue. I'm positive it is a fried logic board, more specifically the GPU, or the part of the board that deals with displaying a picture. I had my new screen installed, but I couldn't get my iPod to turn on, so I took the whole thing apart (removing all the guts from the shell) and miraculously it worked! So I reassembled the thing, but the screen stopped working when the USB connector was put into place. Curious as to why this was happening, I plugged my iPod in (after pulling the logic board out again), and my display worked once more. I quick unplugged the USB cable and placed the logic board back where it belongs, and I was thanked with the smell of electrical burning. At that point, my iPod was toast, but just to be sure, I lined the back of the metal case with electrical tape and put the logic board back in, and voila! I have a $200 flashlight. The thing is now a picture-less iPod Touch.