The unresponsive section is non-intermittent, and is much more evident in left right movements and less so in up down within the bad section (when holding the zune vertical), indicating to me whatever equates to the x or horizontal axis sensor for the screen is bad right at that 1/2" section. I haven't seen it go away yet.
The "wigging out" problem happens every fourth or fifth time that the screen is activated from sleep. From the actions of the zune it appears to be a very confused touch screen trying to do all actions in a rapid manner without user input. I'm pretty comfortable with it not being from external influences and internal to the zune. I'm kind of just watching it out of curiousity now to see if things progress, eventually I'll take it in and get it replaced.