I'm now going to answer my own question. I took my nano apart which was slightly nervewracking but worth the effort. After I got the main board out I could see much more clearly up the headphone socket and lo, it was full of fluff which was compacted at the bottom of the socket. So I used a pin to extract the fluff..bingo. Now freshly emboldened I may try installing linux on the thing. I'm I nuts or what.
R Fowler, April 2007