No audio iPhone 3G

I recently contacted apple support about my iphone 3g. At first i tried to play music and make a phone call but when i tapped on a song it said no audio, when I did the phone call it just dropped the call as soon as i tapped call. The tech told me to restore it. I did! Now i cant play anything on it, i can make a call and answer calls but i nor the other end can hear me, also it makes a funky vib when texts and emails through and randomly the bell shows up on the screen. Apple told me that since it was out of warranty that i would have to pay for the repair but i cant find anything on the price. If the repair is more than a upgrade to iphone 4 i might as well do that but id rather keep my phone. Any ideas?
Windows 7