Symptoms:
1) On power up, during apple logo, screen fades away as if it ran out of power, then reboots, and keeps looping like this. Sometimes, it doesnt fade away and is just purely stuck on logo.
2) Hard to get into DFU mode but doable after a few tries using iReb
3) In DFU, shift-restore in itunes loading original ios, gets stuck on "Preparing to restore iphone" then gives Error 1601.
4) TinyUmbrella fix recovery loop doesn't work
5) Pressing the home button or applying a slight pressure to any area near the button makes a white flicker on a specific spot at the bottom edge of LCD.

My guess is there might be a short inside the iphone near the dock connector and button area. This might be why I'm having USB issues (1601) and seeing the white flicker. It's possible this is also affecting the boot up. Maybe the ios is corrupted due to a failed restore by the previous owner because of the short.

What do you guys think? Should I attempt to open it and inspect for shorts?