Yes, it was an ipod issue not the car. The iPod worked fine with headphones and more importantly with a dock.
I fixed it by doing a full wipe and reinstall, that worked, very odd as it all connected fine and displayed as it should be working. Never had that issue before with an ipod, had it working in my Lexus without hitch for 5 years, good solution for me, sound quality is acceptable and easy to use with itunes
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