iPhone 4 erratic touch screen behavior

Have u ever charged your phone using mobile charger or car charger? or 3rd party charger?

in some case, this kind of charger can messed up the electrical stability on the phone that affecting the capacitive touch...

i suggest bring ur phone to apple, since seems like hardware issue, as restoring not helping it

 

Do you have a screen protector on it? Maybe oil build up or something on that.

 

Make sure your screen is clean, grime and buildup on the screen can cause this kind of behavior.

 

Mine gets like that, but only when hooked up to a third party charger (cheap one). Not plugged in it always works fine...

 

This is EXACTLY what happened to my most recent iPhone 4 the past couple months (about 2 months after I got it). It is an unused factory replacement (no other person ever used it) for my first iPhone 4. Neither Factory restore nor a NEW LCD remedy this problem, which is what has led me to believe this was either a problem with the RAM/CPU/motherboard or power (perhaps too much power output). What I have done is replaced the battery and so far the problem has gone away. Coincidentally, I started searching for whether the battery could affect the capacitive touch screen and then I found this post. I hadn't realized third party chargers could do that and I know I've used cheap non-apple approved chargers. My suggestion is to change the battery and see what happens. Otherwise, it's likely a damaged motherboard component.