Hi there piddlepants (interesting name!)
I have three thoughts to your problem here!
My first thought is this. I doubt it, but if the new iTunes is not that "atuned" to the older iPods, then it might be that iTunes is not communicating with the iPod - or that particular iTunes is faulty and may need re-installing.
The second thought is that given it is 3 years old, your iPod may be a "sort of Proto-type" and has a lower life expectancy than those we have on sale today. It is possible that because of the everyday use has resulted in a final breakdown - being what could possible be a damaged hard disk inside the iPod.
This is a bit more far-fetched than the above but... it is possible that one of the tunes that you have added to the iPod contains an infective piece of data which has either damaged iTunes or the iPod.
I am not a genius - and there is possibly a slightly different reason, but they are possible!