Ugh. Finally got bit by the Lock/Unlock button unresponsive bug.

Question

My phone is over 2 years old. 
I have taken very good care of it.
The lock/unlock buttong "just stopped working" yesterday.
Does anyone know what my options are?
I do not have Apple Care.
Will Apple repair this for free?
Can I exchange for a refurbished phone?
Will Apple repair this for a charge?
I've done some research on this subject on the web, and IMHO it's not a "defect" but a poor design-flaw. 
It also seems to be a very common problem--too common, in fact, which is very disappointing given that there are so few moving parts on the device and the "home" button and "lock" button are fundamental elements of an iPhone's operation. 
Sigh.
J.

Answer 1

First off, thank you for your input.
I would consider that they repair it for free for 3 major reasons:
1) It is not user serviceable--any attempt violates warranty.
2) It is not 3rd party serviceable--without violating warranty.
(So for reasons 1 & 2, I am fully dependant on Apple to resolve the problem.  Since I cannot fix it myself, if I go to a third party and they screw it up, at the end-of-the-day I truly have no recourse.)
3) Most importantly,  It IS a common problem.  A quick google search reveals this.  It is NOT a defect, but a design flaw. The choice of "bubble" type switch is not robust enough for the application, there are more simple and durable solutions.  Just because you "don't know anyone" or "haven't had the problem" doesn't mean it's not common, and also doesn't mean you may not experience it tomorrow. 
Also, you do not have the same model phone as me.  It is possible the design is different in your model.
As with most electronics, a 1 year warranty is pointless.  Most electronics fail within the first few uses or not at all for quite some time.  I have worked a few retail jobs selling all kinds of different electronics.  Whether it's a Television, Computer, or Microwave, this is the case with most items.  The ones that fail after the warranty, but before 5 years, it is often the case of a design flaw that unlucky customers get stuck with - OR - in fairness, the customer broke the item.  I did NOT break this phone.  It was working perfectly until a few days ago.  It "just stopped."  It was very-much a shock, because I had not dropped the phone, nor got it wet, nor exposed it to excessive dust or humidity.  (Regardless, it is in an Apple "bumper" case)
The "stuff happens" argument is a very poor one to make for many reasons:
2 years is no where near close to an eternity.  With fair & reasonable use, this integral part of the function of the device should last more than 2 years... especially given that I "baby" my electronics.  (The phone has not gotten wet.)  The iPhone has very few moving parts...  they should all last.
An iPhone is a product valued @ $750 (for my model, at the time of purchase) 
To have the "on/off" switch of a device worth close to a thousand dollars break after 2 years, that's kind-of crappy.  The phone is extremely inconvenient to use without it.  And, God-forbid I have an issue and need to reset the phone, I'm screwed.
Maybe in your world $750 isn't much money to you and it's easy to accept a failure such as this.  To me, it's a lot of money, and it's insulting to spend another $150 on a replacement, which could then also have the same failure, since no one will know the purpose behind the refurb (in most cases, it's a simple return of the item.)
Apple prides themselves on making the 'best products' in any category they participate in.  A failure of a component such as the "on/off" switch through standard use is unacceptable, and should be repaired at their expense.