Faulty phone, unlocked, T-Mobile won't repair

I bought a phone from T-Mobile in March 2008. I later went abroad to work, where circumstances led to me getting the phone unlocked. The phone worked fine until earlier this year, when the navigation buttons started to play up. Now back in the UK, I took the phone to a T-Mobile shop, to be told that they could send it away but as it was unlocked it would probably be sent back unrepaired. The assistant was unable to tell me what the basis for this would be. What is my position? (It seems to me that the locking of phones to networks is, essentially, a restriction of competition; locking and unlocking is entirely a software matter; but the fault on my phone is very probably a mechanical problem, and anyway started recently, and therefore the argument that "whoever unlocked the phone caused the problem" cannot be valid.)

Thanks in anticipation.

Thanks for the reply, Tony. I may be cynical and pessimistic, but I can see this scenario:-

1. I take the phone back to the T-Mobile store
2. They say "We can send it off, but as it's unlocked it probably won't be repaired"
3. I say "Send it"
4. It comes back a month later unrepaired "because it's unlocked" (with a note pointing to some small print somewhere that says "if you unlock the phone then we wash our hands of it")
5. I then have to take up cudgels with T-Mobile management
...and all the time be without a phone.

Is there a recommended way to short-circuit this process? e.g. a form of words that will make them realise they are not dealing with someone who will be fobbed off? Also, under what circumstances would they be obliged to lend me a replacement until mine came back? (I think I saw this mentioned elsewhere)

Thanks again in anticipation.