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The problem, as you describe, is exactly that! One of your buttons is stuck down in the pressed position. If you press Home and the screen comes up asking you if you want to quit and a button is already pressed down, you will not be able to press X to confirm yes or no.
You didn't specify which PSP you have, 1001, 2001, or 3001, but the following website sells the part you need to fix this issue. They also perform repairs if you're not comfortable doing it yourself. It's a pretty cheap and straightforward part to replace: