Why won't my home button work?

I recently bought some new parts for my iPod touch, a new headphone jack that was broken, and a display screen because we cracked the original by opening it. Everything works fine about the screen, but the home button will not work. I'm positive we set it up right, we put the sticky part against the metal, but it looks a bit crooked, I don't think that would effect it though.

And to make matters worse, I tried resetting my iPod to factory settings on iTunes to see if it was a software problem, and now the #^@! thing is stuck in recovery mode, and it won't let me restore the iPod. I've looked up fixes for that problem, but they require the home button which I don't have. Am I screwed here?