I have the precise same issue, except with a LG Optimus Chat and with Koodo mobile; I can send and receive SMS just fine, and call other, but when I receive a call, the phone ring for 1/2 a second and then cuts the line, while the other person hears a "busy" tone. When I tried to ask Koodo for their help, they basically tried to make me believe it was a hardware issue (i.e. my fault, thus not covered by warranty) and make me pay the whole thing to get a new phone. Considering every other aspect of the phone is working just fine, I refuse to believe my phone is genuinely broken (especially not "by my fault"). Funnily enough, I also got my phone in October 2011, but the problem only started occurring in March 2012.
Anyone got any luck getting this issue fixed and/or not having to pay for what really looks like a software issue?