I was once had my iPod with me this summer, in my pocket, and thought for a moment, hey this is silly having this thing near the water...so I before I started casting I tucked into my Canyon bag...few minutes later a school of blues starting pushing the bait right up against the rocks. Absolute mayhem, and in the midst of it all I accidentally kicked over my bag and lo and behold the contents spilled...into a mm-deep puddle of water. The ipod, which had one of those rubber sleeves, got on one drop of water inside the sleeve and instantly fried. So yeah, it was an expensive lunchbreak session...
Anyway, point of the story is it got me searching for a waterproof case and found one through a company called Otterbox (
www.otterbox.com). It's a hard polycarbonate case, and is less than $30. They claim it's watertight to 3 feet...but I'm not about to test that claim. There's another one from H20Audio that's good for surfing, diving etc...but it's $120 or so. Either option is cheaper than $300 for a new Ipod (having learned the hard way

) and well worth every cent.