I had a similar problem where my mic and mic buttons were no longer working. At first I didn't realize the mic itself wasn't working, because people I was talking to were hearing me through the iPhone's internal mic. They'd complain of loud noise when I'd slip the phone into my pocket...
The problem was resolved once I dug out a huge wad of pocket lint that was preventing the plug from seating fully.
The problem was resolved once I dug out a huge wad of pocket lint that was preventing the plug from seating fully.