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The touch on the screen works as a seperate component from the screen itself. Either the lower portion is damaged and has to be replaced, or it is wet and can't sence touch as a result. The one may get better in time if the components don't corrode, the other is probably not resolvable...
Have you tried doing a hard shut down? Hold the silver button down on the upper right corner and also the home button (center,bottom indented button) together for about 10 seconds. the phone will completly shut off. then wait about 10 seconds and hold down the upper right hand button until the apple appears on the phone then release the button and wait (20-30seconds) . Doing this usually solves all my issues with my iphone when it gets locked up like this.
pls consider changing ur digitizer it is faulty following are some links where u can get an idea of the cost try apple for the warranty or ur service provider it is hardware fault may be it is covered in warranty
I have a smiliar problem but only because I was a bit of a twit and dropped my iPhone on the cement and thus, breaking the screen. So now part of my screen wont accept the touch.
If you did not drop your iphone, there are some other possible reasons:
If you have more than one finger touching at one time (unless doing that cool little double finger zoom in), the touchpad will not respond. I have caught myself doing this on accident if I am holding it so my thumb is touching part of the screen as I am trying to make a call or write a text.
The touch sensor is malfunctioning. Sure, this could be a software problem (which is why I am including the directions for the dreaded restore below), but the iPhones touch sensor seems to be a bit sketchy in both the 2gs and 3gs. Since you just bought it, it should be under manufacturer warranty for a year. Go to cingular's website (used to work for cingular/at&t and know that if you go to the store, the procedure is to you to call the 888 number with a smile and do nothing else), get the warranty/customer service number and get them to replace it.
The only bad side to either resetting or replacing your phone is that you will lose your contacts. But, if you choose to try this route (which, in the worst case scenerio, will put you in no worse of a position than you already are with a phone you cant use), I will provide some instructions:
Turn off iPhone - Hold down the Sleep/Wake button
for a few seconds until the red slider appears, then slide the red
slider. Ignore this step if your iPhone is already off.
Press and hold down the Home button for about 10 seconds until a yellow triangle with a text which says Please Connect to iTunes appears.
Plug the iPhone into Mac or Windows PC. Release the button if you haven’t.
Run and open iTunes if it’s not already opened yet.
iTunes will prompt a message that says iTunes has detected an iPhone in recovery mode. Click OK.
You will be taken to the iPhone pane. Then, click on Restore.
Wait for the full restoration process to complete, and the iPhone
will be back to the original settings state as when it left the
manufacturing factory, typically a working phone again if you face any
problem, unless it’s hardware related.
As you have already said your iPhone has been tampered with, you have an Unlocked iPhone which renders the warranty Void, even if you put the phone back to defaults once the iPhone is in Apple's hands the software tools they run against your phone will tell them it has been hacked and you will get no support.