IPod hold button broken(?)

My 2nd generation nano's hold button will not switch off. It is about three years old and the adhesive started detaching from the top button housing, where the hold button is.
After flicking the ipod on and off, and seeing no change, I decided to remove the top covering and expose the hold switch. I tried manually flicking the little red switch with a paper clip, nothing happened and it remained in the hold position.
The ipod is still working properly.
http://img526.imageshack.us/img526/1366/ipodnanotop1.jpg
http://img27.imageshack.us/img27/1711/ipodnanotop.jpg
Any suggestions would be appreciated.
Message was edited by: TJ Goose

Almost assuredly the answer is yes.  Take it to an Apple store for replacement or contact them using the Contact Us link at the bottom of this page.

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