Flybaby,
Unfortunately, it is possible for the touchscreens to degrade over time and eventually become uncalibratable. Yours may have reached that point. If so, the only options are to retire the unit or send it back to AP for a fairly-pricey repair.
Your best bet is to call their support line and speak with someone at AP directly. They've got the list of tricks to try to see if the screen can be cajoled back into behaving properly. If not, they can offer you pricing on repair or upgrade options for your consideration.
FWIW, I have _the first_ 720 unit that was shipped to a customer. My screen ended up becoming uncalibratable sometime around a year or so ago; I opted to have the screen replaced, and it's been doing fine since then. (It is now my "backup iFly", as I find myself using my Android tablet most often, unless the sun is just behind my left shoulder and I can't see the screen.)