I replaced screen, works well. Just noting in case someone would come around wondering, if a screen with no visible damage from a fall/impact could be really broken, as described.
Roughly around step twenty I found tiny black plastic tab having hole through on my desk, little fella felt out sometime during disassembly and I never found out where it belongs. Nevertheless iPod seems to work well. Funny fact: I also teared away the hold switch and had to replace the whole ribbon with jack connector, and attach speaker to it with new wires. This Nano was the most annoying repair job I ever did.:-)