unfortunately its not photoshop. its my brand new iphone shipped by att.
i was on the phone with both att and apple for a couple of hours today. resolution - get to the nearest apple store and speak to a genius. i think most stores are out of stock.
:-(
Surprising that no one has seen this kind of a problem. I am guessing the overall quality of the typical iphone is good then. My bad luck that I received a faulty one.