iPod Classic stuck on locked mode regardless of hold button

My ipod has been working fine daily, until i plugged the charger into a USB of my friends car. i played songs and when we finished i unplugged it and since then it has been stuck on "locked" mode, even when i switch the hold button to "unlocked" mode...

The ipod wont reset when i hold the correct buttons down (ive tried every possible reset combo that exists)

I also restored the ipod from itunes which didnt fix the problem

And lastly, i let the battery die. when i let it die, i made sure i wasnt able to turn it on, and when i plugged the ipod into my computer it is charging and syncing music perfectly fine yet still is stuck with this "locked" icon!!

so its like everything else is functional except that the ipod thinks it is locked :(

Any more ideas of what i can do? or how simply plugging it into a car caused this? (ive plugged it into different cars before without a problem)