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While replacing the LCD panel in my iPod Touch 2nd generation I desoldered the home button spring off from the logic board. Is this component a ground and needed for the ipod functionality or I don’t bother with it and continue assembling the ipod ?

lemerise if you are referring to the little gold/copper “Z-Shaped” spring just above the dock connector in the center of the picture. That is what makes your home button work. It is the contact that, if it is broken or not attached, causes the home button to not work. Hope this helps, good luck.

Home button spring can be purchased on Ebay for $9.99 Home Button Spring for iPod Touch 2nd/3rd Generation That was the only place I found that sells it. The diagram for the home button is like this: http://imageshack.us/photo/my-images/215… In that image when the digitizer is in place 1 and 2 are in contact with each other and 3 and 4 are in contact with each other. The button just completes the final connection. If you don’t want to pay $9.99 then you can just solder a thin wire between pad 3 and pad 4… that’s really all the spring is doing (connecting 3 and 4). The home button when pressed will make the final contact.

I mcgeyver’d it and took a bit of solder braid, shaped it like the spring, then flowed solder into it while holding it on the board. turned out great

No It’s not needed. You can Jailbreak the unit then in Cydia install activator. It will let you use a finger swipe to replace the home button, it’s a very useful app. To get into DFU mode here is a link that has a tutorial on ho to get into DFU mode without a home button. Update Here is the link http://iphoneblogr.com/2012/06/enter-dfu

Key does not slide? How can I get in?