Not heard of this one before. The volume control doesn't tell the radio what volume level to set, it gives an indication of whether you want the volume to go up (CW) or down (CCW).
I'm sure the part is sealed, so cleaning would be difficult at best. But take out the radio, take it apart, and try spraying some electronics cleaner on it. Radio Shack sells TV tuner cleaner that works great. Also check to see if the part is soldered on well or your problem may be a loose solder joint.
One other possibility - do you have the radio buttons on the back of your wheel? Do you have a wheel cover. Can the wheel cover be interfering?