Touch screen malfunction even after reset device

Has anything happened to your device prior to this failure, such as drops/impacts, contact with water or a repair attempt?

The most likely culprit here is the digitizer however because it is fused with the LCD, it will require that you replace the entire assembly. These are quite pricey so you may want to have a repair shop look at it and do it for you if you don't want to buy the replacement parts "upfront". It also requires some soldering to transfer over the sleep/wake sensor.

If you'd like to do it yourself, then look at this guide first to see if you are comfortable with the steps required/