Is this a hardware problem?

Question

I have had my Iphone 4 for a couple months now. When I updated it to ios 5.0 I didn't have any problems with it. At first, then after awhile I noticed that it started doing this really weird thing. Sometimes, I could be either using an app, or not doing anything at all and it just be on the home screen, and suddenly the screen would sort of pause and the blinking circle would show up, and maybe last 30 seconds - 1 minute, and then my lock screen asking for my passcode would pop up. I didn't think anything of it, because like I said, it was sort of random and I figure it was just something that happened sometimes, like with computers. Then recently, as in this past weekend, I noticed it was doing it more often (I was out of town and using the phone a lot more than I have in the past) and realized it was doing it more often. I had asked the guy at my AT&T store if he knew what was wrong with it, said he never heard of a phone doing that and to update to 5.0.1 and if it still did to call Apple support. So yeterday, i called Apple support and told him what was going on, he also seemed ot have no idea of this problem, told me to update to 5.0.1 and if it still did it, to call back. So I updated, it seemed to work at first but then it's been doing it again, and even more. Such as its noon as I'm writing this and I swear its done it already six times since I woke up 6-7 hours ago. That's just when I notice it. if it's plugged in, either to the computer or the wall, the way I realize its done that is because it'll beep, like when you connect it. My main question is, has anyone ever heard of, or expereinced this problem? Is it a hardware problem? Software? Update? Something I did? The phone works wll enough for what I need it for, and I'll be happy with that, as long as it keeps working (again, I've only had it two months, so I can't upgrade for a little over a year).
Is it possible that this could be a water damage result, as I may have gotten some water on the phone by accident? (Another eason I'm asking about other issues). There are no signs of corrosion or anything anywhere on the phone. So I'm just curious about any help any one could provide. thanks!

Answer 1

Just to update, I took my phone to AT&T (since my nearest Apple store is two hours away and before making a drive wanted to see if they could help). Two different guys looked at the phone and tried different things and both said they thought it was something in the software and it turned out the problem was something in the settings. We reset ALL settings and so far it's gone nearly 36 hours without doing it ONCE (and it was doing it like, every 10-15 minutes). so I hoping that that means its totally fixed the problem. So I'm still not sure exactly what it was, but I'm glad to know that all I had to do was push one button that saved me a two hour drive as well as $149 (if not possibly more).