Failed downgrade - iPod touch with broken home button
You need to get your device into a state called Recovery Mode, and then iTunes will automatically detect your device and let you restore to the latest iOS. For an iPod touch 4th gen, there are a few tools that can get your device into Recovery Mode for you without the use of hardware buttons. The best ways are to use redsn0w or iRecovery, but the steps are really complicated to use those utilities. There is a tool called RecBoot that claims to work, but I haven't used it, so I can't speak to it.

Edit: I actually had to use RecBoot the other day, and it worked great.