I had similar problem, tried everything but could not solve this problem. This problem would happen with any touch screen if there were a dirt particle stuck on the screen. Tried to clean the screen with a damp cloth it still does not work open the axim as per instructions on this site.
http://www.gethightech.com/Merchant2...axim_takeapart
Clean the screen thoroughly and same time press all the contacts. It worked for me and hope it will work for you.