You need to send it to Apple and they can replace the touch screen. Only way I know to fix what you have (which is a dead spot/zone in your touch screen).
Did you try a full wipe and restore? I would just to make sure that the digitizer/alignment/software didn't get out of sorts. Perhaps even wipe it then try it in factory condition just to make certain.
I tried a full restore and it didnt do anything....It is weird because it is not like that part of the screen is broken, its just that some applications that part is unresponsive...