HTC Desire :: Can't Make Or Receive Calls From My Phone?

I used my phone with no problem yesterday (made and received calls), then went to sleep and charged my phone overnight. When I woke up this morning, I tried to make a call and just got "this number is not in use", thought it was something to do with that persons number. Tried to call some other numbers and always got the same thing. I asked my brother to call me and it just went straight to voicemail. Then, when I opened "Phone" I noticed that there was something wrong with my last few calls made. Phone numbers here in Iceland are 7 letters, for example 1234567.. but all the recent calls I made looked like 6171234567, that 617 always got added before the number I tried to call and that made it fail. I only see 1234567 when trying to make the call, when I look at the phone while listening to "This number is not in use", I never see that 617 until I've hung up and check the call log. I did try to call +3541234567 though (354 being the Icelandic country code) and that went through fine. But if I don't use it, the 617 gets added. Has anyone ever experienced this problem? I thought it might be some setting so automatically add a country/area code before a number or something like that, but didn't find anything in settings.