Iphone 4 - signal issues after upgrading to latest ios 6

I upgraded to ios 6, as suggested by itunes on my iPhone 4 and that's last day i was able to make a peaceful call.
My signal just goes for a toss once i make a call. I see the 3g Symbol vanishing and the other person is not able to hear me but i am able to hear them.
Once i disconnect the call, the signal changes to E and then goes to 3G. Tried the below solutions as suggested in forums, but no luck
Please help..I am missing my iphone terribly.
1) Shift + Restore using itunes - Didnt work
2) Reset to Factory setting - Didn't work
PLEASE HELP !!!!

I have taken it out of the case - I figured it would obstruct the sensor (also have no screen protector).
Only thing I haven't tried from the Basic troubleshooting steps you mentioned was to "restore as new".
That I did try it tonight (succesffully restored), BUT my problem still exists.
You mentioned to go in the MAC store > Would they replace it (for free) if they reach the conclusion it's some sort of manufacturer faulty wiring even if it's a 3Gs (as an old model)?
Would they still if phone had water damage (this I'm just curious - the phone didn't)?

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