Reset loop - Apple Logo/Red Cross

Hi

I have a 3rd gen Nano 4gb that is caught in a reset loop. The Apple logo appears for a few seconds then it goes to a red circle with cross in before looping over and over.

If on AC it loops the Apple logo to 'please connect to iTunes'

Things I have tried:

~ Diagnostic mode - passes all ok

~ Reset

~ Disk mode - does enter disk mode and iTunes will prompt to restore but resets before completion.

~ Restore mode - after a reset it doesn't stay on long enough to enter

~ Hard reset - doesn't appear to work

Any other ideas what i can try?

PS

No water damage, never opened.

Cheers

Neil