My iPhone 3G which i bought from ebay about a year ago broke 2 weeks ago. It wouldn't turn on all of sudden and not get recognized by computer, pressing the home and power button did nothing. After a week it turned on but i noticed the home, power button and wifi don't work at all. I restored the iPhone and it didn't fix the problem so i think it is a hardware problem. Im in UK and the nearest Apple store is like 20 miles far from me so i can't go there and talk to them.
Apple has an out of warranty replacement program, cost in the US is $199(whatever that converts to in the UK). Make an appointment at an Apple store. Bring your broken phone with you, it must be complete...not in pieces.
If they won't handle it (usually only with iPhones that have been modified by the user or broken into pieces), they'll send it back. You may have to pay shipping, but that should be all you'll be charged.
Perhaps you could print off your ebay transactions or ask the seller for a receipt of some kind? I'm not certain apple will accept these but it's worth asking.