I was having the exact same issue with my Shift, it started last week. Was running MikShifted-G 2.1, went back to stock, same issue -- phone only responds when the keyboard is slid about 1/4 of the way out.
I brought it to my local corporate Sprint store, they checked it out, and said it was a known issue; a ribbon cable and LCD need to be replaced. The tech said that Sprint has been getting inundated with this exact problem recently, and the parts are on backorder. Apparently the ribbon cable wears out over time, and everyone's are crapping out at the same time.
They hoped the parts would be at the store in about a week, my fingers are crossed.. I have ESRP so the fix will be free even though my phone is over a year old. The tech said the actual repair only takes a few minutes as long as they have the parts.