For the past few weeks sometimes my nvidia shield portable's screen would stop working or it acted like someone was controlling it. I would fix it by closing and opening the screen a few times. Sometimes I would have to restart it. This was all on android KitKat. I had enough of it so I upgraded it to lollipop to see if that would fix it. It seemed to happen less on lollipop. Now no matter what I do I can't get the screen to register touches. The virtual mouse works, but it is almost impossible to type with. I bought it from ebay a year and a half ago. I also rooted it about a year ago. This all started happening the last few weeks. I tried factory resetting it and locking the bootloader, but it still doesn't work.
most likely your shield is about to give up the ghost. think of it as nvida putting in a senor that will go bad after a period of time to make you buy another one down the road.
I have the exact same problem with my shield. It started only a few days ago and like you the touch screen usually starts to work after I open and close the lid a few times. I have no idea how this has happened as it was not dropped or damaged in any way. I use it everyday for very long periods using emulators and messing around with wallpapers and such. I have even opened mine up so I can see if any wires were loose or if any damage had happened but it looked ok to me. Maybe it is because it gets used fairly often that it has ended up like this, but for it to happen almost the same time as your shield is strange. My shield is also rooted and is android 4.4.2.