I am not familiar with that model of phone. I would have first suspected a short on the keypad somewhere causing the phone to not recognize that you are pressing the volume adjustment, but if the LCD is showing that those button presses are being recognized, you have me a bit stumped.
The next possible issue would be in an I/C chip, which you should be able to compare with a good phone using your oscilloscope.
I will think about this some more...