Hi,

I had the same issue and when pushing battery, like said above, the flashing passed.

I guess the issue is related to the one described in http://talk.maemo.org/showthread.php?t=66870&page=19.

To test, I put some paper under the phone's body and the sheild protecting those chips.

I've tried to reflash my device and it went smoothly. When booting the phone I have no more the message "All telephony functions are disabled. bla bla bla...", just something like "Unable to connect. Contact service".

I guess the hardware problem could be fixed by resoldering those chips or putting some more presure on them.

I'll test and keep you updated.