A new white iphone 3G 16GB just taken out from box
it was 2.2

after jailbreaking with QuickPwn and playing with it a couple of mins

The right vertical side of the screen became unresponsive




Is this a hardware issue ??

Yes, it is.

If you can't apply the warranty, your best try is to open it, unplug and replug the touchpanel from the logic board. Of course with the phone powered off.
Then assemble it, turn it on and verify.

Good luck!