May I suggest you do a hard reset to get your system to clear all the third party applications, just make sure to hot sync before you do this so you can back up all your files and prc's.Once done, try to see if your jog dial works. If it does then it's one of your programs, so filter it out til you find the cause of the problem. And if it does not work after the hard reset, chances are it will not work anymore and you do have a hardware problem and not just a software conflict :(
hope this helps :)