Nice one berzerker. I came across essentially the same fix:
1. Open an official Apple App like the clock or compass
2. Hold the power button until u get the slide to turn off
3. Hold down the home button until the slide to turn off goes away.
Problem fixed! It seems to be a software collaboration issue with the button - rather than mechanical - as unintuitive as that seems. Works everytime.
In case your iPhone home button has become less sensitive or is even broken, iOS 5 has come up with the great solution named ‘AssistiveTouch’ feature. Assistive Touch is one of the accessibility features in iOS 5 that can be served as a workaround, if your iPhone home button is broken.
How to Enable Assistive Touch to Access Home Button from Screen in iOS 5:
Got to Settings -> General -> Accessibility. Scroll down to bottom and tap on “AssistiveTouch” option. Set it ON to activate the option.
after doing this, you will see a transparent button bottom right, touch this, a touch menu will show up. This transparent button can be used as your new home button. Its fabulous! Good luck!!!