I've just done a complete swap of the innards of my iPod Touch as both the lcd and rear case were damaged (I bought it like this with the intention of repairing it).
Everything was working well on it, however when I turned it on for the first time only the front camera was working. Pressing the camera swap button on the top right caused the software to lock up, however neither are working now even though I have not done anything to it.
I'll try the reset feature as suggested above and see if that helps.