Will not shuffle the Album

Check out this User Guide

Page 34 talks about the repeat icon - is this active? perhaps you just need to turn off the repeat function.

From page 40 of the guide

Setting iPod nano to Repeat Songs

You can set iPod nano to repeat a song over and over, or repeat songs within the list you choose to play.

To set iPod nano to repeat songs:

• Choose Settings from the iPod nano main menu.
• To repeat all songs in the list, set Repeat to All.
• To repeat one song over and over, set Repeat to One.

HIH