I had that happen to my 1st gen iPod Touch. I would select a network, enter a password, and no bars would show up and I had no internet connection. As it’s “condition” became worse, I would select a network, then the network would disappear. That’s when I returned it and got a 2nd gen. You can do the Renew Lease, which you can see after you click the blue arrow beside the network. Have you tried resetting the network settings? I did that about a billion times, along with restoring the iPod. After that you should just reset all of the settings. here is my source for doing most of that.