I have exactly the same problem, and not been able to resolve yet. I've never got my phone wet, however three network engineer says it may have been damaged due to moisture or condesation in air. I've only had the phone for just over a month so had a long chat with three customer rep, still they refuse to listen to any reason. This is a faulty phone, and they refuse to admit. I've seen exactly the same phone, with same condition on ebay.
AngryWithThree, July 2008