Originally Posted by lhrsfo

I find that my iPhone does this fairly often. It shows bars but I cannot make calls and, as I have discovered, incoming calls go straight to voicemail but I'm not notified of the voicemail either.

This state continues until I do a hard re-boot - hold down the button at the bottom of the screen and the on/off button simultaneously until the phone switches off - ignoring the off slider.

According to the advice line I called, it's one of many known problems with the iPhone 4: it scrambles itself quite regularly and this is the way to unscramble it.