I have not dropped the phone but I upgraded to 3.0 and unlocked a while back, worked fine for a while. Now I have to restore about 10 times for it to work for a day. I've restored as a new phone and left it bare bones, same problem. I've hard-resetted it numerous times, even the red off slider on top won't work, so I don't know if it's the top/bottom problem everybody talks about or the whole screen. Eventually it works but only for a day. No warranty and I have Tmobile.

I've used redsnow numerous times and even unlocked without Cydia. If it could be hardware problem, is it definitely the digitizer?

I have the same issue with touch screen not responding more then 1/2 the time. I do not believe it is hardware related due to a few tricks I have learned in getting the screen to respond. If I hit the on/off button then the home button the screen will respond every time without fail...after a short period of time the screen begins to fail, slow response or appear locked up. The screen will again respond after 15-20 seconds but that is frustrating to wait. The problem began when I updated to 3.0, I thought updating to 3.1 might fix it - no luck. I updated to both 3.1 & 3.0 without unlocking or using redsnow but the issue still remains. I haven't tried downgrading my itunes (I'm running 9.0) but I have read others who have tried by down grading and they have had no luck. I have little experience in hardware/OS knowledge but my feeling is OS is buggy from Zphone/pwnage/redsnow and every other unlock I've put on this phone over the last 2 years, I'd like to believe the phone is truely "blank" and restored after a DFU but again I don't know enough to comment. I love the phone and the wiping it out and trying to fix what's broken is all part of the fun...waiting for the screen to respond is not so fun.