Seems like Apple might repair for it you based on the latest news about this: https://www.macrumors.com/2014/04/25/iphone-5-sleepwake-replacement/Unfortunately the warranty is over. But i did take the time to read through the thread on the apple support forums again. Someone there found out that the problem could be handled by pressing the left side of the button instead of the middle. It worked for me. Still funny though, because for me and others on this thread the problem occurred right after the software update. But this solution points to a hardware issue after all.
This leaves me frustrated still. it's just a frustration of another kind.
my phone is 16 months old and now i need to repair it, at my own cost. I was just using it the way it was intended to be used.
PS: this is the second time Apple really disappointed me. First was when after the iOS 7 update my iPad 3 was made unusable (super-laggy typing).