iPhone home button no longer works

Solution 1:

Have you checked that when you re assembled the phone you lined up the positioning of the dock connector correctly, a tiny bit off and it will cause the home button to not work.

See this solution for removing the back of an iPhone 3GS for disassembly instructions. On step 29 you will see the importance of this components positioning.

Solution 2:

If you can't fix the Home button mechanically, you can use a workaround to still be able to use your device, provided you have upgraded to iOS 5 or later.

Enable "Assistive Touch": Settings -> General -> Accessibility. It essentially shows a home button on the screen. A good way to breathe life into a broken phone.