IssueTracker

The log messages are related to a technique used in Android 4.2 to reduce accidental presses on the main navigation keys while typing.  This "dead zone" should not, however, be active when touching the navigation keys in general, only during a short window after you've interacted with the rest of the screen. And the dead zone does not extend all the way to the bottom of the screen; it's worth trying to touch the navigation keys all the way at the bottom of the visible screen area to see if that still works.

I wonder if you might be having a hardware issue; a defect with your touchscreen that is causing stray motion events elsewhere on the display, invoking this DeadZone feature to prevent touching the navigation buttons. This could potentially be confirmed by turning on Pointer Location (in the Developer settings) and looking for stray touches elsewhere on-screen.

I turned on Pointer Location and I am not seeing stray touches. To me it looks as if the touch indicator cuts off halfway through the bottom buttons as I drag my finger down. I see the touch indicator only on the top half of the button I am touching. It does seem like a hardware defect where only that small portion of the screen is not responding to touches.

Hmm, yeah, that does sound like the touch panel is not responding on that edge of the screen.

I'd be interested to know if you can touch the screen in that area when there's something else there; that is, rotate the phone into upside-down landscape (so that the navigation buttons are up by the earpiece) and see if you can interact with the system (or generate Pointer Location traces) in that area. For that matter, I'd be curious if you can operate the navigation buttons when they're at the other end of the display, too.