I remember with my 3rd generation ipod (ie. 2003 model) it would have brief skips at the same point in songs when in lossless format, and this was to do with the RAM of the ipod I think. That is to say that the music file is loaded from the hard drive into the ram and then processed. If that model had, say, 16mb ram, that would load maybe 4 songs in a lossy format. When in lossless format, a 20mb file would stutter as it needs to load the remaining part of it from the the hard drive into ram in order to play it.
It would do this at the same point in longer tracks in lossless format.
Could be a possibility?
With regards to not letting the ipod sync/failing drive, sometimes formatting the ipod using disk utility on OSX or windows explorer then restoring it and whatnot in itunes would solve that problem from what I recall. Obviously, if the drive has had it you might lose the music you can at least play. Seems strange that it can still read music though, and write some data (ie. updating play counts etc), and i suppose it is still possible to create playlists on it, so data is still being written to it I think.
Just some thoughts. Hope that helps someone.