you need to try and find out what part is fucked on the phone and try and do it yourself.

I tried to repair the screen digitizer on my 2g iphone but its pain in the ass on the 2g as they have stuck the outterscreen glass, digitizer and lcd panel together. You have to prise the lcd away from the rest without cracking it and its a cunt of a job - i cracked mine

pretty easy to open if you have the tools too.