I know that these steps may not work for all of you, but this is what I went through to finally resolve my severe proximity sensor problem:
1. I discarded the old case I was using that was interfering with proximity sensor operation.
2. Still having bad problems with this I tried the Reset All option. This did not fix the problem for me.
3. After discussing with Apple support, I (reluctantly) performed a Restore (as new device). This worked for me, but I didn't want to have to set up all my apps, mail accounts, music, etc. from scratch, so I followed this up with a Restore (from backup) and the proximity sensor continued to work.
4. Just for the heck of it I put the working phone into my old case again - and it began to fail.
I've been running for two days now without a single face dial (without the case). It's worth a try going through these steps, as Apple support will probably want you to do this anyway.