Soft Reset is more than just power button... Hold Power + Volume Down buttons until phone vibrates and reboots (about ten seconds).
Try using SysApp Pusher to make sure Touch is updated properly:
SysApp Pusher | Windows Phone Apps+Games Store (United States) Install and run SysApp Pusher > scroll down list to "touch" > tap name > at bottom does it offer to update or install? > do so
If this does not solve the issue you will want to make a backup and then use the second tool on this help page (LSRT):
FAQ - How can I recover/reset/restore my phone software? - Microsoft - USA