I ordered mine on ebay, and they said that after they replaced the battery, the hold switch no longer worked. So when I got it, I opened it up. The internal part of the hold switch that connects to the button outside was connected to the logic board, and mine was broken off so there was nothing that the outside button could attach to. I am no techie, but I am pretty sure in order to replace that part, you may have to replace the logic board. Or if it is not broken, and you attempt to slide it back into place so that it can catch the hold switch, do so with caution because if it breaks clean off you will have more problems.
I have this ipod, and I actually opened mine with a razor blade, then I wedged a thin knife in there once I got it open enough. Then I slid it carefully around the edges until it finally came open. You are right, it is harder than they make it seem. It took me about ten minutes or so to do carefully as to not break anything. Good luck!
I don't know if you are still looking for an answer to this question, but I have one of these and it can be quirky like that too. Did you try pulling it apart, and pulling the batter connection out? If you disconnect the battery, there would be no way for it to run any longer, and maybe if you plug it back in, it would start working again. Mine does weird things like that too. Then it will run normally for months.
I have an old iBook that does the same thing. the black screen I know is a bad GPU. (Ive actually asked a similar question on here.) So when I start it up, I push down on the left of the touchpad, and that keeps it from going black. Don't know if that applies to iMac or not though. But it could never hurt to try.