And I found an example of what happens when the mounting of the flash chip is damaged after a fall. Also very similar to the problems I experience.
http://talk.maemo.org/showthread.php?t=69081

So a number of possibilities:
- wear because of age of the flash chip.
- damage to mounting of flash chip because of dropping the n900
- melting/short-circuit because of flashing/backupmenu
- damage because of overclocking/kernel-power