Area near battery connector overheating

I have a strange situation with my IPOD Classic 5. I noticed that the unit became very hot to the touch around the wheel area.

I took the unit apart and took off all the cable connections, and the hard drive from the unit. Then connected back the battery alone and connected to power source. I also monitored the current flow during the charge process and it was around 0.35 for a while then eventually tapered down to 0. The heat on the board measured with a laser meter was around 73F, which was consistent with the readings at the start of the charging step.

Once the battery was fully charged, I connected the hard drive to the unit, connected the hold cable. The device booted up and was usable. When I plugged the unit to a charge source, the thing started to heat. The battery drained very quickly as well. The unit then started to go into a reboot cycle.

In the picture I have posted, the two chips that are boxed in red are overheating. Temperature jumps to over 99F.

I checked the battery connector. It is soldered tight. Battery is new. The drive was working fine.

With a battery on full charge, the unit boots up and is able to go into diagnostics mode where things check out. I can put the unit in disk mode or go into the device menu.

The moment I connect to a power source or plug into a computer the heating problem starts and the unit starts to die.

Any suggestions as to what may be going on?