I have seen some posts saying its part of the board and also part of the charge pot area. The button clicks but it's not being recognized. I've talked to other tech that have successfully harvested and replaced buttons. Keep the info coming hopefully we can nail it down.
If the phone is within a year you can take it back to apple for an exchange. I'm sure they will give you a refurb but its better than what you are doing now.
I have been trying to get a new screen to work, I am successful going from the white screen to apple on the original. I am unable to get it to work on the new screen. I get all 3 buttons held down and in about 5 seconds the screen goes back and doesn't do anything else...What could that be?