The same thing happened to my Power button. The plastic button you see is just a link between the actual button on the circuit board and the outside of the device. Sometimes it is possible for the button to be pressed hard enough, and scooted to the side a bit, so it catches under the edge of the case. I took a small screwdriver and attempted to pop it back over, but it came completely loose down in the case. I opened up my iPaq and fixed it better than new in about 15 minutes. That is not an option for most people though.
Dan East