Rear camera won't sit flush after front and back replacement

I have done a tear down after my iPhone 4 being run over by multiple cars when I dropped it accidentally crossing the road (on a rainy day too). I have replaced the front and back however I can't get the rear camera to sit flush to close the back. When I get it going it says it needs to be activated, then won't connect to iTunes, instead iTunes says it can't access my iPhone and it needs to be restored, I have never restored an iPhone, does it wipe it clean?? Do I lose my purchases??

Anyway, after about 5 mins or so, it goes into overheating mode and I have to shut it down before it burns my hand. The heat is emanating from around the top centre and rear camera...

Does anyone have any answers??