I managed to crash the startup script on my iPod Photo, when trying to update it.
The syptoms constantly force restarting its self after starting to read from the HD.
I did eventually managed to sort it. How?
Put the iPod into disk mode (press and hold select and menu keys to reset, then when you see the apple logo immediately press and hold the select and play keys). You can then connect it to a computer and run a disk utility app over it.
Fingers cross the disk utility app will sort the problem out. If it does your fine, you can just eject the iPod, disconnect it and it will hopefully work. It did for me after a few runs of the repair disk in disk utility. Any comments let me know.
I had same problem, just fixed my 5 gen iPod right now following your directions. Thanks a lot man. You rule!!!!!!!!!!!