Tried everything - receiver and regular Ipod volume - now what?

I have gone threw trouble-shooting instructions: Power on and off, did reset,
and restore. Got on this forum and tried the suggestion of plugging in headset over and over, both powered on and off.
Speaker works when the phone rings, when answering the caller cannot hear me unless I select "speaker" mode. Headset works with Ipod but nothing without them. I can see the volume move when using the volume control.
It appears that is is time to send to Apple, unless anyone knows of something I have missed?

Well, just tried cleaning the plug with rubbing alcohol, but still nothing.
I did not mention earlier, that everything working great. But, recently two variables were different. One was the upgrade from Apple. The second is bought a system to play over my car speaks, it is the type that is put in the tape deck. Had to get a Adapter Kit to plug that into the phone.
I bought the system, tried it and all seemed fine (but got no calls at the time). Did the upgrade that night. The next day listen to music in the vechicle was fine. When I got a call I could not be heard by the caller.
Later I found out about the Ipod not working on the regular speaker. Had not used that after the upgrade. So, not sure if either of this had anything to do the problem I am having.
I will try to keep the Headset plugged in. Don't know what else to do.
We do not have a repair center here. It was purchased at an AT & T store, but they stated they do not service them. That would result in me sending in or
driving approx. 100 miles.
Thanks everyone!

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