Why does the iPod Touch automatically turn the volume all the way down

Since it’s practically impossible to diagnose a problem like this without physical access to the iPod and the SoundDock, I’m going to give you a few ideas of what I’d try to do:

• If you have access to another iPod, try that of course, if that works, we’ve found a problem with your particular iPod.
• If you have access to another SoundDock… well, put your iPod in those and see if the problem lies in your SoundDock.
• Since the last two were two obvious (and you probably thought about them), let me tell you that you can go to an Apple Store with both devices and try the above combinations there. I’m sure that you will find another SoundDock in an Apple Store to try your iPod and that they also have iPods so you can try your Sound Dock. It doesn’t hurt to ask.
• In any case, the remaining obvious alternative is to restore the iPod, either to factory settings (and later using a backup) or to restore a backup (so you don’t lose everything).
• The final idea, is to try 4.2, but that should be the last step. You don’t want 4.2 to introduce new “undiscovered” problems on top of your old problem.

Sadly, there isn’t much else we can do from here. The can’t charge or incompatible device message is “ok” most of the time (I had that problem too with a car adapter), but it worked anyway.

I’m sorry I can’t come up with a better idea.

Just had this same problem... I fixed it by spraying a Contact Cleaner on my Ipod/ITouch.. and it works after... sometimes, Dust or Dirt will cause bad connection between the Unit and the Sound Dock Port *

The unresponsive iPhone/iPod Touch home button is a known problem. I had an iPhone which started with the same problem as yours. At first the home button worked with just a soft touch, and from any angle. Then it started to work only with a hard press and not at all from certain angles. Finally, it either completely ignored presses, or responded to a single press as if it had been pressed twice (multitasking bar appeared).

It was still inside the one-year warranty, but I bought AppleCare anyway, figuring that it might recur. I took it to an Apple Store and the guy played with it for a minute, told me I had a faulty device and gave me a brand new iPhone. The home button can't be replaced, so they just give you a new one.

My advice it to take it to an Apple Store if there's one nearby, or if not call Apple and report the problem. Most likely you'll get a new, working iPod Touch.