Same problem and I've got everybody beat, on the bad side. This needs to be an Apple fix and soon. I took an old iphone 3gs 32gb to be used just for music, and no sim card for phone calls. I've taken off all apps that aren't for music, so I've left Pandora, Spotify, tune up radio etc. I've taken off all email accounts, all contacts, and ALL MUSIC since I have iTunes Match. I've taken off photos and texts.
35 apps, for music
0 texts
0 Email accounts
0 photos
0 books
0 contacts
0 Music since I have itunes Match
0 Videos
And after 3 restores and 3 hard resets
= 26+gb of "Other"
So now my actual real apps and things are about 2.8gb. The infamous OTHER is taking me over limit. Go figure. I have OTHER of over 26gb that should be nothing since I've taken everything off. That is after I've restored (which puts the latest system on my iphone 3 times in the last 2 days and done 3 hard resets. There is no remaining music on the phone, no books, no podcasts and no photos or anything else that should contribute to OTHER. My next step is to erase everything just to get it all erased, but what a huge and should be unnecessary hassle. Then I will need to load all apps fresh.
C'mon Apple, figure this out.