You have to desolder the old connector and solder on a new one. I have the repair detailed on my blog. It takes a very fine-tipped soldering iron, and steady hands. I do all of these repairs under a microscope. If the phone malfunctions after the repair, there's a possibility that there is a short somewhere.
I got the same problem. To many open/close I guess :).
Luckily, my younger brother is a real star with surface mounted components. But tracking down a new one was a lot harder!
Finaly I found a site: http://www.earth2k.com/fpc-ribbon/
Doesn't cost a fortune, but a little on the expensive, especially with S&H to Sweden! But it still beats a brand new iPhone :).
Before I realized that my brother could do this, I did a search on the 'Net to see how difficult it was. Nothing for the faint-of-heart! It's not impossible, but way to ... risky for me. So instead I looked at some forums (there where quite a lot of them!) and found some people that said the could do this. So I thought about mailing a few of them and ask if they could do it for me...
Luckily I didn't have to, but this is an idea for the rest of you...