Ipod Touch 3g Power Button Unresponsive

OK from sometime last week when i picked up my ipod and used it for a bit. at the end i pressed the power button and it did not lock. It decides to work when it wants to but the majority of the time it doesn't. When it first started i was on IOS 4.1 then i upgraded to 4.2.1 to see if that would fix the problem. After i updated it, i still had the same problem. I got this Ipod for X-mas last year (so it has around 1-2 weeks of its 1 year warranty left. i have done all the troubleshooting things i have seen on apple.com and the internet, so i out of ideas. Can i get it replaced? or what happens here?

I am from Australia and there is no apple stores in my city/town. if that helps anything. What can i do?