HP Spectre x360 Touch and Pen Work Only In Certain Areas of the screen

[kabirkanha]

My HP Spectre x360 is about 2.5 years old and costs a big packet. Unfortunately, about a year ago (6 months after the warranty expired), the touchscreen started misbehaving. 
Initially, the upper 10-20% of the screen stopped responding to any touch/pen input.

Over time, the issue has become worse and spread to other parts of the screen and become so bad that the pen has been rendered useless and I virtually do not have a touch screen laptop anymore. The image below shows the regions in which the touch still works, and as you can see, it is a really weird issue.

https://imgur.com/a/NlbmtnV

The touchscreen only responds in these two bands by now and nowhere else. I have not been able to find a similar issue elsewhere and am hence posting here. If anyone has any advice to help resolve this issue, I would be extremely grateful.

Some information about my PC:

• Device name KabirKanhaSpectreX360
• Processor Intel(R) Core(TM) i7-8705G CPU @ 3.10GHz 3.10 GHz
• Installed RAM 16.0 GB (15.8 GB usable)
• System type 64-bit operating system, x64-based processor
• Pen and touch Pen and touch support with 10 touch points

I have already tried the following steps suggested by the HP virtual assistant but without any luck:

1. Cleaning the display with a soft, moist cloth.
2. Installing the latest Windows updates.
3. Using the Hardware and Sound Troubleshooting tool.
4. Performing a hard reset.
5. Updating all device drivers.
6. Updating the BIOS.
7. Running the HP PC UEFI Hardware Diagnostics Component Test for touchscreen (I was not able to pass the test obviously)

The assistant refuses to assist me any further and directed me to this HP Support Home. I am a solo user of this laptop and have always kept it clean and handled it with the utmost care. I see no reason for this issue to have come up. I paid a lot of extra money for the touchscreen functionality and the Pen, and it breaks my heart to see it not working.

If anyone has any advice, please help. Thank you so much.