The ipod is still showing the error 702 but is no longer showing the other ones.
I am not quite sure how I got it out of it's 'restore loop' but I restored it a lot and one time it just worked!
I still think there is something wrong though, if you copy a large folder (100mb-ish +) the copy operation fails but if you copy small folders (- 100mb-ish) it copies fine. Also Itunes always fails to sync my ipod and Songbird syncs but no songs are visible in the Apple firmware (the songs are all present on the ipod, checked with rockbox) so it is not really 'fixed' just not stuck in recovory mode. I still suspect that the hardware is damaged in some way.
PS browsing files and the rockbox database is sopmtimes VERY slow on my ipod. is this a fault with my ipod or is it just typical of HD based ipods?
http://www.oceanliving.org/tech/2008/05/09/fixing-an-ipod-stuck-in-a-restore-loop/ shows how someone got out of restore mode (my ipod 'worked' before I tried this)
UPDATE: out of desperation I used the whack-an-ipod method: hitting it on the table! This really worked and I was able to to install rockbox and sync the rest of my music/videos. It still runs very slowly sometimes and video playback is pitiful (on the apple OS).