Today I had my daughter’s iPod touch gen 7 in for repair. It simply stopped turning on, and the Home button felt as if it had sunk in slightly.
I removed the protective case and was already about to remove the screen when I noticed that it had almost completely detached on its own. It turned out that the battery had swollen, forcing the iPod open.
I installed a new battery (the battery contacts are soldered – a soldering iron is required) and put the button back in place. The battery was ordered here. Disassembly instructions here.