As an update: I have managed to turn on and off + plug into USB now without a panic stop, by rebooting the ipod into Apple firmwareand then back to Rockbox*. However the computer hangs when trying to recognise the drive so I can neither manage files nor reload nor remove Rockbox.
I hope that this is not basically the ipod killed, so if there is any advice out there, would be appreciated!
*I did this by holding Menu and Select buttons till it starts a reset, then quickly switching on Hold. When the Apple logo appears bright I then switched Hold off. Took a couple minutes but it booted up with the Apple firmware. Computer & Rockbox utility still couldn't recognise the device though.