Why does my iPod Touch automatically turn the volume all the way down?
Three things can cause this:


The down button is now physically pressed (or the electrical contact has shorted/failed)
The headphone jack is sensing a volume button press (much less likely)
software is corrupt (very very unlikely, but still possible)
bluetooth remote (also very very unlikely)


You can restore the device to rule out #3. Turning off bluetooth nixes #4. You might be able to rule out #2 by trying some different headphones, but I've seen that fail in ways that headphones in or out won't help. You'll need a repair / exchange to fix the first two issues if it's not caused by a temporary piece of debris or light cleaning with clean, dry lightly compressed air.