SIM has stopped working. Unable to change PIN.

Hi all,
Working on a user's BB pearl 8120. He has been given a new handset (another pearl) replaceing the original one which had suffered wear and tear. Anyway, this morning he could use the original handset with the SIM inserted. I tried to move the SIM into the new handset and was prompted for the pin, which didn't work (tried twice), so I swapped the SIM out and put it back in the orginal handset, where it didn't recognise the users PIN.
Not a problem - I could get the PUK code from our service provider, O2 and then reset the pin. However this has not happened. The PUK code is accepted and it lets me choose and then verify a new PIN, but then displays an error message saying either that the PIN could not be changed OR the PIN did not match the existing PIN and could not be changed.
I have spent most of the afternoon on the phone to O2 and have been told that the SIM is now locked out, even though I still have three attempts left with the PUK code. I was under the impression that you have 10 attempts at the PUK code before it locks out the SIM for good. Interestingly, I've tried the PUK code a few more times since and it seems stuck on 3 attempts left.
I hope the above rant makes some sense. I't's been a frustrating afternoon trying to resolve this and I'm now resigned to having to order a new SIM card - which will no doubt please the user, who wanted his phone up and running this aft. Has anyone else had this happen to them? As I've never seen this occur on any handset or any other network before.
TIA.
London_Exile.

Please please please please help me on this one too and 1 other.  I have put my perfectly working SIM into my old unlocked blackberry Pearl. Entered the PUK given to me by my carrier but nothing and absolutely nothing works for the enter PIN stage.  Take my sim out and put it back in any of my other handsets (HTC and Nokia), no problem to get going.  So what is the matter?
The other problem is i simply cannot find an OPTIONS icon or anything similar so where is it? Settings - Advanced Options I have or Settings - security options, but how the heck do I get to the ordinary OPTIONS to find device options.
Making me cry with frustration.
Thanks

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