[Triggerhappy]

So I got a WEEK 39 iPhone this past weekend and lo and behold, when i boot it up, its 1.1.2. Total kick in the groin there. Well that sucks, so I go and try to jailbreak it so that I can find out if the bootloader is 4.6 too. Unfortunately, when i get into the preference screen it seems that the phone has no wifi. I can turn wifi on/off, but no networks are ever found. my other phone shows at least 5 in the area with mine being easily connected to.

Is this a faulty iPhone?
If not, can something be done about it?
Also, I purchased it from someone and it wasn't shrinkwrapped. Could he have been playing with it and accidentally upgraded to 1.1.2 and in the process blew out the wifi?

Any help would be appreciated.

Edit:
Things I've tried:

I've tried downgrading to 1.1.1, wondering whether i should go to 1.0.2 as well.
I've tried resetting network settings, as well as All settings.
I've tried making my wifi completely open i.e. no wep key in case it could only pick up open networks for some reason.

Update:
Seems that this really was a 1.1.1 phone that was updated to 1.1.2 unnecessarily.
It had a version 3.9 bootloader.
I downgraded to 1.0.2, and replaced the baseband with 3.14 to no avail.
I then unlocked it in 1.0.2 and nothing.
I now have an unlocked, jailbroken 1.0.2 phone with 4.01.13_G modem firmware that STILL can't use wifi.

Is this a hardware issue on the phone?