Secondly, Verizon's network seemed to be having trouble reactivating phone for a while. I updated my baseband at about 3AM Pacific time this morning and kept getting "Activation unsuccessful" messages. I saw lots of others posting that they were having similar problems around the same time even though people who had tried it earlier were successful. I went to bed and when I woke up my phone was able to activate on the first try.
Give it another go using *22899 and see if it works now.