Have you found a solution to your problem?
I am also having a problem since upgrading to iOS 5. I am in Oman right now (on assignment) and all my contacts are prefixed with +968 (Oman country code). When I receive a local call, iPhone does not match any of my contacts and just displays the number as it does not contain the country code. Removing the country code in my contact list though creates problem on my Messages as SMS is received with country codes and will not match my contacts if they are saved without the country code.
I hate that I have to add the same number twice. One without country code and one with country code. Has anyone able to fix this? Any help would be appreciated.
1) Open the Phone and dial *228. This is a Verizon over-the-air programming number.
2) When the system answer press 1 for "Program or activate your phone"
3) Wait for the call to disconnect. You should get a prompt stating something like, "Settings updated."
5) Wait a few minutes (I waited 3 just to be extra safe)