- We used high-resolution angle-resolved photoemission spectroscopy to reveal the Fermi surface and key transport parameters of the metallic state of the layered colossal magnetoresistive oxide La1.2Sr1.8Mn2O7. With these parameters, the calculated in-plane conductivity is nearly one order of magnitude larger than the measured direct current conductivity. This discrepancy can be accounted for by including the pseudogap, which removes at least 90% of the spectral weight at the Fermi energy. Key to the pseudogap and to many other properties are the parallel straight Fermi surface sections, which are highly susceptible to nesting instabilities. These nesting instabilities produce nanoscale fluctuating charge/orbital modulations, which cooperate with Jahn-Teller distortions and compete with the electron itinerancy favored by double exchange.