There's a dome underneath the volume key on the droids that will sometimes get metal shavings underneath it. Follow the guide for taking the droid apart and check the dome under the volume up key after you get the back housing off, being very careful to remove the dome and sticker as one piece, since you'll have to put it back on. You want to make sure the tiny black dot between the orange sticker and the dome stays in the center of the dome. Cleaning the silver/gold area on the housing that the dome set upon with a toothbrush and alcohol should help and also check the dome itself for any debris and scrape any off with fingernail or very gently with a small flathead screwdriver. Make sure to let the alcohol evaporate completely before putting the sticker with the dome back on.

If you're having issues with the power button too then it may have something to do with the flex in which both the headset and power button are on. I would first check the connection of the flex which is directly under the headphone jack on the inside of the phone. If there is any corrosion on or around the connector, clean it with isopropyl alcohol and a toothbrush. I also agree with attempting to clean with a q-tip and alcohol inside the headset port.

Something that also helps with some connection issues is transplanting the small piece of foam rubber sticker from the top of the connector of the old digitizer and putting it on the new one, it usually has an orange sticker with a number on it. If there's nothing wrong with the connection then it usually works without the foam piece, but the piece will sometimes give it that extra pressure when closed to help. Also, when removing that foam sticker make sure you peel from underneath the sticker not in the middle of the foam. Get in between the sticker and metal of the top of the connector.

The piece is from the top of the mainboard under the LCD/Digitizer flexes. It keeps the flexes from being pinched by the mainboard. -Coop