If the issues with the Dpad and XYAB buttons is merely a hardware problem. Would rubber tact switches such as these help this device be more responsive?
Judging by how far one must press the dpad in order to get a response, I think these can fit. They can be soldered to corresponding points and glued to board. Just putting it out there as an idea?
note: the use of these tact switches would eliminate the rubber pad that makes contact with board. And we would gain the nice button press feel we expect from a device such as this.