When you try to add a new exchange account on your iphone you get ‘exchange account verification failed’ or ‘cannot connect to server’. This might also be causing Server ActiveSync 3005 errors in the event viewer.
In exchange 2003 (on server 2003)
1. Expand Global Settings
2. Right click Mobile Services and select properties
3. Tick both boxes under ‘Outlook Mobile Access’ – Enable Outlook Mobile Access and Enable Unsupported devices.
4. Wait at least 5 minutes and try your iPhone again.
UPDATE: Microsoft have released a tool for testing active sync problems – it is very useful for diagnosing problems with iPhone connections.
In my most recent case the problem was caused by deny access being set under the Microsoft-Server-Activesync website.
To fix: Open IIS manager, expand default website, right click on Microsoft-Server-Activesync and select properties, select directory security, click edit under IP address and domain name restrictions. Click Granted accces and click ok – restart IIS.