I had the same problem and it is discussed further here: http://www.last.fm/group/ScrobblePod/forum/100556/_/441378 My work-around to the manually managed ipod vs last.fm face-off: make the ipod psuedo-manual by setting it up as automatic but synching only with selected playlists. Scrobbles just fine (with scrobblepod/ last.fm scrobbler), and you can manually manage the playlists. Its more or less the same as manually managing the ipod, until you want to take stuff off the controlling computer (but not off the ipod)!
It is otherwise not possible to scrobble manually managed ipod with scrobblepod. Perhaps that should be made clear in some prominent place, for example in a FAQ where one downloads scobblepod. I sought this app out because I was having similar failures with the last.fm scrobbler and have spent quite some time to discover the above fact! That said, it seems a whole lot cleaner and simpler than the last.fm product.
Wow, it would have been incredibly helpful to know that before download & install. My music library is huge - 1T+ - far more than my ipod can support, so I manually manage - which was fine while iScrobbler was still functional. Now it looks as though my scrobbling days may be done. An FAQ or a user guide would have been very good to have.
I think the library-too-large-for-iPod problem is fine. I listen to most of my music on an old 4GB nano, and I manage it by having it sync a single playlist and adding & removing stuff from that. This works fine, and ScrobblePod is very happy with it. You could obviously do this with multiple playlists - I just have one because that's all I really use playlists for (I'm an old-fashioned "listen to the album" person).
ScrobblePod
Scrobble iPod without music sync