Saw Tun explains in the video above how he went about fixing the issue. The real problem is that debris or moisture has shorted out the contact that switches from headphones to speaker inside the headphone jack — not that the speaker itself is busted. Cleaning it out with a cotton bud is a quick fix to what could be an expensive repair. (You’ll need to remove a little of the cotton from the head to make it fit effectively.)
We’re willing to bet the same issue occurs with some Android phones too, so it’s worth keeping in mind even if you don’t have an iPhone or iPod Touch.
How to fix the iPhone speaker problem (water damage) [The Blog of Saw Tun via Boing Boing]