My iPhone 3GS wifi wont connect if I leave the house with phone and come back

So my iPhone 3GS (which i bought in December 2011) (out of warranty), will not connect to wifi.. My phone already has problems (randomly i lost my network and it always stuck on No Service, which doesnt allow me to make calls or send texts ). I have a backup phone that I use, but I still use the wifi on my phone for playing games, listening to music, etc. (basically using it as an iPod). But recently, I started having problems with the wifi, every time I tried to load a page, the wifi dropped and it did this constantly. After a while it quit dropping, until one day I left the house with my phone and when I came back I saw that I was unable to connect with the wifi. At home the wifi works, but whenever I leave the house with it, the wifi doesn't connect for a while. I stopped leaving my house with the phone so this problem stopped for a while.  But today I ran into a new problem, I did not leave the house with the phone, but simply turned the phone off, left it at home, came back after 2 hours, and turned it back on and was unable to get wifi. I reset the network settings a couple times, but still when I try to connect to a network.. I get "Choose a Network... Other.." with no networks at all showing up. I've been waiting 2 hours yet nothing shows up.. Any help?

Basic troubleshooting steps in the following order.
1. Reset. Press and hold both Power and Home Buttons together till Apple Logo appears.
2. Restore to a backup.
3. Backup, Restore in iTunes and setup as new.

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