I just got my new touch and have the same issues. Seems to play fine if the screen stays on.
On another note, it sounds quite good straight out of the HP out with my iems. I would imagine is sounds great from the line out.
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Seller Feedback: http://www.head-fi.org/forums/f12/wsilvio-201841/
Home Rig: Sonos ZP90 coaxial to Headroom Ultra desktop DAC, Headroom Balanced Ultra Desktop Amp W/PSU to balanced Sennheiser HD800 w/ALO sxc balanced cable.
Office rig: Macbook Pro to Pico DAC to ALO Rx amp to JH-13pro
Portable rig 1: Iphone 3gs 32gb and Sennsaphonics 2x-s/JH-13's. Portable rig 2: Ipod Classic 160(7g) ALO cryo dock and ALO Rx amp to Sennsaphonics 2x-s/JH-13
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