Strange problem - anyone advise?

I had a 7210 which I thought was broken as I had dropped it in water (no sign of life after a day of drying) so I went to report it as damaged. However, as I didn't have insurance I was told to report it as lost so I could get a replacement cheaper (it would also allow me to keep the water damaged one which suddenly started working again after 2 days).

As this original phone was reported as lost, I think Orange (UK) who are my network have barred the phone. I can't get any 'bars' on the reception indicator.

I have gotten a code for these forums to unlock it to use on other networks and went round to my friends house to try his Vodaphone (UK) SIM in it.

Doing this gave me a reception again ('bars' indicator on the side of the phone was at maximum), however when I tried to phone my house land-line to check it worked all the phone did was *BEEP-BEEP-BEEP* in a kind of dull tone (hope you follow).

As my network wanted the phone returned I think it has been blacklisted as lost, but I get a signal using another network - I just can't make calls.

Can someone tell me what is wrong and is there a way to fix this problem?
It is a cracking phone and I'm desperate to be able to use it.

I have scoured these foums and it looks like it has been blacklisted as lost.

Do the companies remove phones from the blacklists at all if you contact them and tell them they have been found?