If you keep your eyes open and look at the details in the listings, you can sometimes find broken iPods cheap that only need a battery, a clickwheel or a headphone jack. 

Battery replacement is pretty easy on most iPods (with the exception of Nanos and shuffles) and you can find batteries with free shipping for less than $10.

Also, you can get a super deal on broken iPod Mini's because they are sort of "vintage".  Did you know you can replace the hard drive in a mini with a Compact Flash card?