Im a little confused, is it water damage or not? Did it just happen out of the blue?
My vote is more on the top keypad membrane, to be honest.
I personally had the same problem and with tones of friend who had the same problem. Its seems that SE designed the membrane badly. When replacing the membrane, be very very VERY gently and careful, it seems to break very easily.

When you turn the phone on, by the power button, does it flash a red light?

Just my 10 cents.
Good luck