Microsoft exchange (hotmail) and Iphone4 problem

Hi,
I've iphone 4. Was using MS exchange to get hotmail.
Over last 3 days it's not working. I've not installed any new software/apps on the phone in this time. I get the error:
"Cannot Get Mail. The connection to the server failed"
I've reset factory settings.
Installed iOS5.0.1.
Rechecked hotmail settings.
Wifi / 3G working fine.
Can anyone suggest what to try next?
Thanks for any help.

It's not just hotmail, it's anything based on ActiveSync.
I had a 3GS up till yesterday but for some reason the battery just went insane, started burning up and using all it's charge in about 2 hours.
I thought it might be due to a bad update to iOS5 and then 5.0.1 so I started looking at peoples posts which suggested removing email accounts.
I removed my Hotmail account and tried to re-add it. It verified ok, but would not appear on the mail accounts list at all.
I binned my 3GS and upgraded to a 4S. Restored from iCloud and had the exact same issue. Can't re-add my hotmail account.
I also have 2 Exchange tenancies on Office 365, a work one and a personal one. They were both restored as part of the iCloud restore, but won't connect either. I removed the accounts and tried re-adding. They appear in the list, but when I try and sync nothing happens. No folders or mail will appear, they both just have Inbox as a default folder.
This all started happening a few days ago for me.
When I check my Exchange server it tells me the devices have been blocked, but there is no visible reason why (especially as they're both using the default policy with minimum security and allow non-provisionable devices).
I added a GMail account and it works perfectly, so not sure if Microsoft has changed something in all of their infrastructure (I don't know if Hotmail is actually based on the Exchange code itself, but I know you can try and connect using ActiveSync rather than the new Hotmail mailbox type, but it doesn't work either way), so not sure where the blame lies here.
Tried logging calls with Microsoft and Apple and getting no where fast!!

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