Take the ipod, use it and enjoy it. Your house, your rules. She doesn't like it, she can move out.
Do not allow her to "earn it back." That's BS. If she wants it back badly enough to earn it, she can earn the money and buy a new one at the store. Being allowed to earn it back for a lesser amount or pay a fine only gives her more chances. That's like all the teachers that give kids three chances before they get kicked off the bus, or a note sent home, or suspended. The kids learn that they do indeed have those THREE chances and use them up!
17? Bah. Make her grow up already. Our 17 year old son owns two road-worthy pickups and an old Impala he is going to restore. He has $10,000 worth of music equipment in his room, an ipod, several hundred dollars worth of movies and books, and an older computer. What did we as parents contribute? The work ethic he learned to earn it all himself except for the computer, which was my old one -- about 6 years old now.
All that said, I would be very careful about the rules I lay down. I would not have told her she couldn't bring it to school. What's it to you if she loses another one? Her problem, not yours. It is far more important to have a daughter that doesn't think she has to sneak around you to do things. She does now and will continue to do so until you allow her to grow and make choices all by herself. Good or bad, she will have to deal with the consequences. Do you want her to feel like she can tell you about her friend that did drugs last week? Or do you want her to go elsewhere when she might be in trouble? Trust her to be able to withstand consequences.
As for the uncle -- well, you can't control everybody out there. I agree, it's waaay easier if the family is all on the same side, but you have to deal with what you've got. If you can talk to him, that'd be a good idea.