You need to download TinyUmbrella. Run it with your iPod Touch plugged in. Tell it to save all SHSH blobs. If it cannot save 4.3.3, then you cannot go to that version. If it can, start the TSS server, restart iTunes. Download the correct IPSW for your iPod 4.3.3 firmware. Press shift (Windows) or option (Mac) and click the restore button. Select the 4.3.3 IPSW you downloaded. It should then update without a problem. Then you can jailbreak it.
If TinyUmbrella cannot save your 4.3.3 SHSH blobs, you'll have to stay at 4.2.1 and use redsn0w to jailbreak.