iCloud activation lock mishap

Hi,

Short version - a new iPhone after "reset to factory setting" claims that it is linked to an account (activate iPhone screen), but when entering that account's credentials, I get "<account name> cannot be used to unlock this iPhone" error.

The series of events was:

* I bought my dad an iPhone. To check it is working I activated it under my apple account (including iCloud) and used if for few days.

* I performed "erase to factory setting" and passed the phone to my dad.

* My dad tried to initialize and got stuck. I am not sure exactly what he did, but at some point he did "factory setting reset".

* Trying to go through the initalization steps, he would get "Activate iPhone" screen that asks for the account used to set up the iPhone, the "hint" matches his apple id.

* Checking my iCloud I saw that the phone is still linked to my account, and so I removed it as per the Apple instructions for this situation (phone locked by previous owner)

* I double checked his iCloud account and the phone is NOT listed there

* Neither his account nor mine can activate the phone right now. (We tried rebooting the phone assuming that it might need to refresh information.)

As far as I can tell the phone is mis-registered in the iCloud setting. Is there a way to solve the problem?

Thanks!

Nir