if you have cyanogenmod installed, there is a test module (under dev tools in the app launcher) called pointer location, which can visualise the pointer as your finger touchs the screen. if your finger go over the region in question (lower half, i believe), you can see if the pointer has been misdirected to a wrong place, or if the finger touch has not been registered at all. may not be a cure, but at least you'll know what the issue is. hope it helps.
Yes tried that. Got a mixed result. Horizontally swiping the screen from left to right on the non responsive area does not register anything. Swiping top to bottom
slowly produces a small gap where the screen is not responding. However doing a fast swipe top to bottom does show I line even at the part where the screen is non responsive otherwise. Can't say what to make of it.
On the positive note, I had a word with the seller (on Amazon) about my current predicament. They told me that they could give me a refund/replacement if I were able to ship the product back to New Jersey. An insured package through Blue Dart wasn't however turning out to be a feasible proposition. So the seller has agreed to give me a part refund and let me keep the phone. The exact detail are still in negotiation. So lets see.
And finally, there is a feature in CyanogenMod which allows the top bar to be shifted to the bottom (for tablet owners basically). Enabling that option on my phone however shifts the keyboard a little up. Giving me full functionality (as the unresponsive part of the screen is not taken up by the keyboard anymore)
Now the only issue is while trying to type in the landscape mode with either the 'e' or the 'i' key not working (depending on whether you're holding the phone with the trackball on the left or the right)
So it's working fine for the past couple of days. Will be taking the phone to HTC here in India. They've given an initial quote of Rs. 500 (around $10) to replace the digitizer (labour only) provided I can procure the digitizer myself. A digitizer would cost me around $30-35 (including shipping). So a total repair job of around $40-50. Now lets see how much partial refund the folks at Amazon are willing to offer.
Since the phone is quite cheap (I got for $269 unlocked) doesn't make sense to send it back and incur a fortune on shipping alone.
Sorry for the long post. I'll try to post a screen shot of the 'Pointer Location' results.
Cheers,
Roy