Dropped iPhone 3G - now white screen

The day after picking up my iPhone 3G, I pulled it out of my pocket and set it on a counter. It slipped and fell about 30" to the floor, now the screen is totally white with a thin, faint green line down the center. iTunes still recognizes the phone and it will sync.
I have done all the resets and restores suggested, including a new phone reset, nothing works.
AT&T says to deal with Apple, Apple says deal with AT&T. No insurance offered thru AT&T or it wouldn't be an issue.
Anyone know what I can do?

I am 400 miles from the nearest Apple store, so I guess I am outta luck there.
I called Apple about repairing it and what they told me is that for $199, they will replace it with a refurbished phone. Unfortunately, AT&T has no insurance or replacement program, so I guess I am stuck with a brick here and a two year commitment to that brick.
Anything I do on my own voids the warranty, and with all the problems that Apple has had with this phone, I would like to have some coverage.
Why doesn't Apple or AT&T offer insurance on these things. Every other phone AT&T sells has insurance coverage, but not the iPhone. If the dang thing can't survive a 30" fall then insurance is a must have.
I am starting to rant now, but this is frustrating. I have always stayed away from Apple products because they are so proprietary. Guess I should have stuck with my own advice.

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