Touch Screen Dead Spots!?!?!

Hi guys. In the past couple of days, my iPhone's touch screen has been acting increasingly strange. The problem is that there is a line of space towards the top of the screen that seems to be mapped wrong to the to the interface, or just nonfunctional completely! In most applications (such as the Notes application), whenever I touch in any spot below the top buttons bar (the one with the "done" "edit", and "notes" buttons on it), no input is registered! Also, if I touch on the space directly below one of the buttons on the top bar (in the supposed dead space), it will register the click on the button, even though my finger is clearly not on the button. To compound this weirdness, it doesn't seem as if this applies to the main application select screen as I have no problem clicking on the buttons for the calendar, SMS, camera, etc...

Does anybody know what the **** is going on with my phone? Anybody else had this problem? Anybody know of any potential fixes? I've tried updating to 1.01 and that didn't do anything. I even tried restoring the iPhone through iTunes but I've still got the same **** problem. This bug has made it very, very hard to use some applications and has actually severely crippled the phone's overall functionality.