That's odd, I wouldn't suspect that DFU is failing. It is highly unlikely that your device is gone forever as there isn't a thing I know of (software side) that can destroy an iPod touch. Try doing less time with the power and home buttons held down. If that doesn't get it recognized by the computer, try:
1 Attach the phone to the pc
2 Turn the phone off
3 Press and hold power. Keep holding power. As soon as you see display on the screen of any sort press and hold home.
4 Hold power and home together for *exactly* 10 seconds
5 Release power but keep holding home until the pc beeps as a USB device is recognized.
* At no point will the display come on. Now your restore should work.
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Source)
Keep trying methods from the source page as there isn't a reason that DFU methods shouldn't work.
But, this is a lesson: jailbreaking is
at your own risk. Things like this can happen, you just need to work harder to make them right.
Also, dump ZiPhone. It has the highest risk of error (because of its method), if you don't want to restore, QuickPwn is a far superior option.