iPhone 5 Screen Jumpy and Scrambled, Now Dead

I have been dealing with a problem where the entire display on my iPhone 5 becomes jumpy and scrambled. During each event the screen would first start jumping, then start scrambling like a pixel soup, then burst to a white-out at which time the screen would be unresponsive. The event would take about 10-15 seconds to develop. Momentarily toggling the power button to reset the display would usually work, but ocasionally I would have to reset the phone using the power button + home button combo move. I have always been current in upgrading the iPhone's software and the problem persisted through all software iterations. I also took the time to wipe and reload the phone several times. I completed this using backups and on one occasion just started from scratch without restoring the backup.

This led me to think it was a hardware problem, so I took it to the Apple store in Seattle (where I live) and in Boise (where I visit) to get a replacement. I could not reproduce the problem in the Apple store on either occasion, especially since it only happened about every 3-7 days. The Apple employees said they couldn't help me because it was functioning just fine in front of them. They recommended taking a screen shot of the problem when it is happening, using the momentary power button + home button combo move. I had already tried this, which led to perfectly normal pictures that didn't show any of the jumpy pixel soup, lines, or white screen. This led me to think the display processor was working fine, but there was a glitch between the processor and the display itself. Both stores said without visual evidence, or demonstration, there is nothing they could do other than have me pay for them to reset the software and run diagnostics. Considering it was just an annoyance, I decided to forget about it and proceed on.

Two days ago the scramble and lines came back with a vengeance. Not only did it affect my display but I now started to lose signal and the screen lost its responsiveness. It persisted long enough, and was so much of an annoyance, that I got external pictures of the phone acting up (attached below). Unfortunately, the situation degraded to the point that the white screen couldn't be cleared and eventually went black. Now there is no more display and the phone doesn't seem to power up any longer. When I plug my phone in it, gives its etherial 'bong' when you normally plug in the power cord. The problem is that it continues to 'bong' every 4 seconds without end.

I am currently 2 weeks inside my 1 year warranty, it expires on 02/15/2014, so I thought now would be the time with my photographic evidence to get the replacement phone. I am on business trip approximately 140mi from the nearest Apple store, so I had to call Apple. Apparently since I have a small chip with a terminating crack in the top corner of my display, the size of this letter 'O', my warranty is void because I obviously dropped the phone which caused this issue. Since I casually conversed with the Apple employees about my problems, instead of scheduling a Genius appointment or deliberately asking them to log our conversation, there is no historical record of me coming into the Apple store with the problem prior to getting the chip.

I've been a loyal customer since the iPhone inception, and it stings that I am now out $650 for a new phone because I'm inside of my 2yr contract. I understand Apple's position, especially all the exception situations they get, but I would have hoped to get consideration because I've tried to do this all on the level. Apparently I needed to document these problems more than I did because Apple is trying to cover their own liability.

The phone has never been splashed upon, or submerged in water. I am a fighter pilot, so I keep my phone in my flight suit's chest pocket under my flight gear. I started to notice my sweat after a physically demanding flight would transpire through my flight suit and coat the phone, so I started keeping it in a waterproof case. Regardless, I don't think the sweat is a contributing factor because the issue started prior to me flying with the phone. The phone is in good condition with no screen scratches and only minor dings to the metal case as a result of climbing in and out of a metal cockpit when I kept my phone in my G-suit pocket.

What I am look to get out of this discussion is 1) Has anyone else had this hardware malfunction and knows a solution to fix it, 2) Does anyone have any ideas for gaining some grace from the Apple Lords, and 3) Make people aware that there is a hardware malfunction with the iPhone 5 that exists outside of the other software caused screen flickers and lines discussed in these forums.

(realize that the pictures below are not constant images. The lines and scrambles vary at a rate around 10-20Hz, and between a normal display, lines, white, and anything in between)