Your love fest for Nortel aside, here are the facts that many of us iPhone users have shared and are experiencing:
iPhone Gen1 accessing Nortel systems dialling **, no issue.
Upgrade to iPhone 3g, turn off 3g and dial ** for a Nortel system and get the dreaded, "exiting the system."
Did the Nortel set up change? No
Did the set up to access change? Yes
Did the Gen 1 iPhone work? Yes
Does the 3g iPhone work? no
Deductive reasoning? The only thing that chaned was the iPhone going from Gen 1 to 3g. Logic dictates its an apple issue. Perhaps the same issue as your Razor, but no other phone, blackberry, sanyo, samsung, treo, report this issue.