This is what I did step by step and it worked like a charm... I had an iPhone 4 when I did this a few days ago. I have documents and data ON in iCloud...
1. write down or take screenshots of all existing shortcuts
2. delete all shortcuts
3. backup to iCloud (I think this clears all shortcuts you have stored in iCloud)
4. go back to settings-->general-->keyboard... You may notice one or a few generic shortcuts pop up on their own. The one that popped up for me was OMW (on my way)
5. re enter all of your shortcuts and phrases
6. when done, back up again to iCloud (stores your new shortcuts)
I restarted my phone. Shortcuts still worked. I just got a 4S and restored from the iCloud backup mentioned in step 6 and my shortcuts worked on my new phone.
Good Luck. I hope this helps everyone.
TO BE CLEAR, ONLY REBOOTING is what resolved MY issue:
This solved my problem when my phone suddenly stopped responding properly to settings and shortcuts. It seemed to go "crazy" with all kinds of "little things" to where I thought it had been compromised security-wise because Siri suddenly didn't recognize ME and decided the phone belonged to someone else in my contact list! OY... Rebooting solved ALL of the issues... Thank you... I don't know HOW to give you credit for that resolution though... Nowhere does it offer a click to indicate that it resolved my issue... ???