Battery Drain when Exchange email password invalid iPhone

Battery drains within 2 hours of 100% charge. How can I stop the iPhone from constantly trying to connect to the Exchange server?
After updating a contact on my phone, I keep being prompted to enter my Exchange mail password resulting in the phone constantly trying to connect, resulting in battery discharge. I am away from my office and my Exchange Server password has expired.
All email is set to manual
All notifications are turned off
Fetch New Data is Off
If I remove the mail Account, I will lose all my contacts which I cant be without.
There was not a problem until I made some changes to several contacts on my iPhone, triggering a sync action. Is there a known issue here where the phone gets in a loop trying to Sync?
How can I stop the phone from trying to sync with Exchange?
Thanks,
DP
iPhone 3GS iOS 4