IPhone 3GS - camera freezes

I have a problem that I can't solve. I've been on the net trying to find a solution but nothing helped.
1.) I tried resetting the phone (both holding home button while startin up and resetting in the menu on the iphone)
2.) I tried deleting everything on it...
3.) Tried creating a new phone in itunes after deleting everything still same problem
4.) I tried deleting the video clip that made the phone get full.
It all started when I was a a concert and recorded a video. The video stopped since there was no more space on the device - quite logical. But when I switched it to camera mode next time it would freeze, the shutter being closed and the small icon "camera --> video" is grayed out and flashing strangely. Since it's grayed out I can't switch it to normal camera but it stays on video mode.
I've now deleted a lot of things on the iPhone but with no luck. The camera just opens with closed shutter and set in video mode with the  "camera --> video" grayed out and flashing strangely.
WHAT CAN I DO?!?!
It's pretty annoying if I've lost my camera because of a software bug!!
Any help would be really helpfull!!!!
Thansk in advance,
Toni
BTW, iOS v. 4.3.5 (8L1) and I would really prefer not to loose all my text messages and other personal stuff.

If you haven't already restored as NEW, without using a backup, that's what you need to do since  you've exhausted all other troubleshooting steps.  You'll have to make the Sophie's choice between your messages and a functioning camera.
However, if you already restored as new (your post suggested this) without success, there is a hardware failure and there's no point in restoring again.  You'll have to take it to Apple or whoever provides iPhone service in your country.

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