This type of rubber will always deform like that, same thing happened to my Palm earbuds, so i just pulled the rubber off, leaving bare plastic. It has to do with the way rubber absorbs the oils from your skin, so if you get the cover replaced, get a "skin" for it or a hard case, otherwise you might have the same thing happening a few months down the road. Or you can just peel off the rubber and replace it with a "skin"
Oh, and i can tell you why your proximity sensor fails, no diag needed
If you can buy yourself a real screen protector and take off the OEM sticker film you have now, the problem will resolve itself. When you apply the screen protector, to avoid bubbles and dust, do it in a steamy bathroom right after you take a shower, preferably while still undressed. This way there'll be no dust in the air and no lint coming off your clothes..
PagePlus is on the Verizon network, so pick Verizon (CDMA phone, isn't it)