After a few weeks of thinking there was something wrong with my little iPod Shuffle, I found out that in shuffle-mode, the iPod Shuffle can’t/wont play back certain kinds of audio files.
Just change it back to non-shuffle and the Podcasts will play fine!
From support.apple.com:
When iPod shuffle is set to shuffle songs it will play all the audio files on iPod shuffle that are not audiobooks. Podcasts of type .m4b or AAC will not play on iPod shuffle when it is in shuffle mode, which is the intended behavior, although a podcast of type .mp3 or .wav may play while in shuffle mode. To play an audiobook or podcast that is on iPod shuffle, set the switch on iPod shuffle to play in order.
Wow. All this heartache over one tiny little switch switched to the wrong position.
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