A bluetooth serial failure has occurred?

I'll take a shot. Who is your cell phone provider? Did you look at the modem scripts in /Library/Modem\ Scripts for Nokia one(s). There are some. Possibly generic that would work. To make this simple, since it is late, #1 here is system log of my Panther and LG phone using one of above mentioned scripts.#2 And the link is an older one about doing the same type connection and the problems with Verizon. But then I never had same error message you got. I searched on that error and it appears that rfcomm can loop and the way to fix that is to bind to more channels which I am not sure how, since the only thing to change , it appears is in bluetooth preferences. I would not touch that, yet. The problem on configs, I believe, is the property is propriotory(spelling?). Or the channel is in the phone settings. Anyway I would try a different modem script in the Library and also check out the other links in #2.
#1
16 01:51:19 localhost pppd[6009]: Sent 14395 bytes, received 83280 bytes.
Oct 16 01:51:21 localhost pppd[6009]: Exit.
Oct 16 01:51:46 localhost pppd[6050]: pppd 2.4.2b1 started by root, uid 0
Oct 16 01:51:47 localhost /usr/libexec/CCLEngine: Starting Apple Verizon Support CCL
Oct 16 01:51:47 localhost /usr/libexec/CCLEngine: Connecting to Network
Oct 16 01:51:49 localhost pppd[6050]: Serial connection established.
Oct 16 01:51:49 localhost pppd[6050]: Using interface ppp0
Oct 16 01:51:49 localhost pppd[6050]: Connect: ppp0 <--> /dev/**.usbmodem3B11
Oct 16 01:51:51 localhost pppd[6050]: local IP address 70.193.4.227
Oct 16 01:51:51 localhost pppd[6050]: remote IP address 66.174.27.4
Oct 16 01:51:51 localhost pppd[6050]: primary DNS address 66.174.92.14
Oct 16 01:51:51 localhost pppd[6050]: secondary DNS address 66.174.95.44
Oct 16 01:51:51 localhost configd[89]: posting notification com.apple.system.config.network_change
Oct 16 01:51:51 localhost mach_init[2]: Server 2227 in bootstrap d03 uid 0: "/usr/sbin/lookupd": exited as a result of signal
1 [pid 6030]
Oct 16 01:51:51 localhost configd[89]: executing /System/Library/SystemConfiguration/Kicker.bundle/Contents/Resources/set-hos
tname
Oct 16 01:51:51 localhost lookupd[6053]: lookupd (version 324.13) starting - Thu Oct 16 01:51:51 2008
Oct 16 01:51:52 localhost set-hostname[6063]: setting hostname to doug-pennington-s-Computer.local
Oct 16 01:53:28 localhost pppd[6050]: Terminating on signal 15.
Oct 16 01:53:28 localhost configd[89]: posting notification com.apple.system.config.network_change
Oct 16 01:53:28 localhost mach_init[2]: Server 2233 in bootstrap d03 uid 0: "/usr/sbin/lookupd": exited as a result of signal
1 [pid 6053]
Oct 16 01:53:28 localhost configd[89]: executing /System/Library/SystemConfiguration/Kicker.bundle/Contents/Resources/set-hos
tname
Oct 16 01:53:28 localhost pppd[6050]: Connection terminated.
Oct 16 01:53:28 localhost pppd[6050]: Connect time 1.7 minutes.
Oct 16 01:53:28 localhost pppd[6050]: Sent 6407 bytes, received 45234 bytes.
Oct 16 01:53:28 localhost lookupd[6067]: lookupd (version 324.13) starting - Thu Oct 16 01:53:28 2008
Oct 16 01:53:29 localhost set-hostname[6081]: setting hostname to doug-pennington-s-Computer.local
Oct 16 01:53:32 localhost pppd[6050]: Serial link disconnected.
Oct 16 01:53:33 localhost pppd[6050]: Exit.

#2 http://discussions.apple.com/thread.jspa?threadID=1691464&tstart=15

Addendum: Does your, About This Mac, Hardware,Bluetooth show anything such as this? And this is off my Tiger machine which connects like the Panther but with same Verizon problem. And also no RFCOMM errors(and note authentication since I am solo user and I just noticed that Docs should be authenticated).

Apple Bluetooth Software Version: 1.9.5f4
Hardware Settings:
doug pennington’s iBook:
Address: 00-19-15-66-b6-66
Manufacturer: Broadcom
Firmware Version: 3.16718 (3.17166)
Bluetooth Power: On
Discoverable: Yes
HCI Version: 3 ($3)
HCI Revision: 16718 ($414e)
LMP Version: 3 ($3)
LMP Subversion: 17166 ($430e)
Device Type (Major): Computer
Device Type (Complete): Laptop Computer
Composite Class Of Device: 1057036 ($10210c)
Device Class (Major): 1 ($1)
Device Class (Minor): 3 ($3)
Service Class: 129 ($81)
Requires Authentication: No
Services:
Bluetooth File Transfer:
Folder other devices can browse: ~/MyPictures
Requires Authentication: Yes
State: Disabled
Bluetooth File Exchange:
Folder for accepted items: ~/Documents
Requires Authentication: No
When other items are accepted: Ask
When PIM items are accepted: Ask
When receiving items: Prompt for each file
State: Enabled
Devices (Paired, Favorites, etc):
LGVX8350:
Name: LGVX8350
Address: 00-1f-6b-3a-34-d5
Type: Cellular Phone
Services: Service Discovery Server, OBEX Object Push, OBEX File Transfer, AV Audio Source, AV Remote Control Target, Phonebook Access PSE, Voice Gateway, Voice Gateway, BT DIAG, Bluetooth Modem
Paired: Yes
Favorite: Yes
Connected: No
Incoming Serial Ports:
Serial Port 1:
Name: Bluetooth-PDA-Sync
RFCOMM Channel: 3
Requires Authentication: No
Outgoing Serial Ports:
Serial Port 1:
Address: 00-1F-6B-3A-34-D5
Name: LGVX8350-BTDIAG-1
RFCOMM Channel: 16
Requires Authentication: No
Serial Port 2:
Address: 00-1F-6B-3A-34-D5
Name: LGVX8350-BluetoothModem-2
RFCOMM Channel: 8
Requires Authentication: No
Serial Port 3:
Address: 00-1F-6B-3A-34-D5
Name: Bluetooth-Modem
RFCOMM Channel: 8
Requires Authentication: No