iPhone 3GS Repair
Whether you are repairing an iPhone 3G or 3GS if proper precautions are not taken things can go horribly wrong such as those you have described.
The Home button and home button flex cable are typically left in the mid frame during a glass digitizer repair for a 3GS. However, if the contacts on of the home button flex cable are compressed or if the contacts are not properly aligned when with the mating contact pads on the logic board during re-assembly then the home button response will be difficult and will require an unusual amount of pressure.
The proximity sensor and ear speaker cable are noted as Cable 3 and are often damaged during dis-assembly and re-assembly. In addition, if proper ESD safety is not followed, the the flex cable and its circuits can be damaged. Since this are is typically heated to loosen the adhesive between the glass/digitizer and the mid frame, an inexperienced technician can over heat the area causing damage to the flex cable or the circuit board. Lastly, during re-assembly if not properly inserted into the connector or if the connector becomes contaminated, the electrical connections become opens and the problems you are describing occur.
The damage you had based on the photo seemed confined to the the glass/digitizer. However, you dropped it causing the glass to crack which means there was a significant impact or torque applied to the iPhone.
If you can say with certainty that the LCD, ear speaker, and home button worked properly after the drop and cracked glass, you should return the unit to the repair shop and have them fix the phone.
The repair shop should have told you of any concerns they had prior to performing the repair that the phone may or may not perform properly.
I hope this answers your questions.
