I found a FIX! I kept getting an error that last fm couldn't find an itunes library every time I connected my ipod to scrobble. I downgraded from itunes 9.02 to 9.0 and my IPOD now scrobbles everything correctly! I researched a site called www.oldapps.com
and downloaded Itunes 9.0. Cleared my user associations on the last fm client and voila my ipod can now scrobble again! I have heard from a few people that iTunes version 9.02 was updated to stop 3rd party software from communicating with it. Downgrade to iTunes 9.0 and you should be fine. Hopefully this thread will help someone out there!