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You will find instructions on how to perform a software repair on the link just below this text or if you press on this text.
http://talk.sonymobile.com/t5/FAQ/How-to-perform-a-software-repair-with-Xperia-Companion/m-p/1103057
Remember to backup your data since the software repair will delete all data stored on your internal storage.
Good luck with the repair and keep me posted! 
@Jonas - Thank you for your thoughts. I agree, it's likely a hardware problem. In fact, I have another thread started for my issue with the warranty repair process (I have an international phone). However it sounds like @NewbieMe has a similar issue that started around the same time; which is either a coincidence or it's possible some event caused this to happen on our phones.
I wonder if anyone else out there has a similar issue? I haven't seen any other posts.
@NewbieMe - good luck performing the repair. Like @Jonas suggested, make sure you have a backup prior to starting. I had good luck calling Xperia Support US at the number given on this page (I always got a human to answer the phone!). Unfortunately they couldn't help me any further because I have an internation phone which requires to me to work through support in China.