The Touch seems to sometimes just go mad and do all kinds of interesting things, including crashes or even self-bricking. It's rare, but it happens, and nobody really knows why.
Anyway, I would propose something even more radical than Blossom. A factory reset does not necessarily erase everything that could be causing problems. Since you know how to flash images, you're essentially on the safe side, because it's almost impossible to permanently brick the Touch. So, what I would do:
- flash diags w/SSH, if you haven't done so
- from diags, flash a pristine 5.1.2 main partition and kernel, delete everything on the user partition (/mnt/us) except for the tts folder, and blast partition 3 ("dd if=/dev/zero of=/dev/mmcblk0p3 bs=1024 count=1024", or so)
- reboot to main. You now have a completely factory-fresh Touch.
- at your discretion, install jailbreak and/or update to 5.3.2
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