Bought the phone at the end of May. The camera never did take good pictures and had a reddish cast to the pictures. Figured I could live with it. A couple of months ago the lens cover starting getting tiny whitish pin-sized speckles. It didn't affect the pictures any so I let it go. The speckles started to increase and now some of the indoor shots show some sort of grid-like patterns. Just happened to see a Device Support Center at a mall so I stopped in to inquire about it. He took a quick look and said that I got water in it. I told him that was impossible because I have never dropped my phone in water or even anywhere near water. Besides, if it was condensation it would eventually evaporate which it never has and it does not look like condensation but more like a crystallization of some sort. He insisted that I got water in it and said that it would not be covered under warranty. He never bothered to look inside the phone to see that it has no signs of water damage. I guess I could be blamed for not returning the phone when I initially bought it when I noticed the picture quality was off but for this guy to blame me for the phone having water damage is really uncalled for without thorough inspection. He never turned on the phone to see that everything else worked fine. What kind of Mickey Mouse "techs" does ATT hire for their Device Support Centers?
Not sure about the Inspire in particular, but all HTC phones have moisture sensitive stickers inside the phone. If you take your battery out, there is usually one on the bottom or sides of the battery itself, and one on the phone under the battery. You would have to disassemble the phone to see the others (which voids your warranty). But you should be able to look at the one on the battery and under it, at least. The stickers are usually white rectangles. They turn red or pink if exposed to moisture.
If your moisture indicators are still white, I'd try to send it for warranty repair. Its still possible that indicators inside may be pink/red. But no way of knowing until HTC opens it up.
If the stickers are white (the ones you can easily access), and no other visible signs of damage, my belief is that AT&T has no basis for denying you the warranty service. If their are no signes of physical damage or moisture damage, AT&T is required to repair or replace the phone for up to a year of the purchase date. The white specks just sound to me like dust. I have seen HTC phones get dust inside them, and on the lens. I doubt AT&T can rule water damage simply from some white specks.
If the stickers are pink/red, HTC will deny you warranty service and likely send the phone back to you. Regardless of whether you have exposed the phone to water or moisture, this is their policy. Based on reports by others, they will not make any exceptions on this.
Not sure if moisture or condensation relates to your camera issue. I haven't heard of a problem like the one you describe. But I'd try the warranty repair route.
Thanks, Redpoint. After struggling to remove the darn battery cover again and messing up my nails, I noticed the little white sticker on the bottom of the battery. Yep, it's still white. I knew there was no way moisture would have gotten in there. Maybe I'll try a different Device Support Center and hopefully I'll get someone who's more helpful & diligent. Your help is much appreciated.