I was able to temporarily fix it by slightly flexing the phone, by holding the sides with one hand and pushing down simultaneously on the top and bottom edges with my other hand. Of course, you have to be careful not to flex it too much or else the screen will crack. Anyway, after doing that the digitizer behaved normally. I have a feeling it is something to so with the adhesive in the display component (what holds the LCD and digitizer together). It must be separating slightly due to age or pressure from being stowed in the pocket. It looks like a hardware replacement is the only sure way to fix it.