Help-my phone locked iPhone 3G

Hi all
Id really appreciate it if someone could give me some advise as Im getting passed from pillar to post on this one...
I have an iphone 3GS, which was purchased from an apple store. SInce Ive had the phone Ive been on Orange PAYG. I wanted to switch from Orange PAYG to O2 PAYG and did this on Mondy 11th, transferring my no. across to O2. However, the handset is locked and the new O2 sim wont work in it, and now, nor will my orange sim.
Prior to all of this, I called orange to ask them to unlock it, they said there was a problem with the IMEI number and I should ask apple as it was bought from them. Called apple... who told me they arent authorised to do it, my service provider should do it... I explained... so I was advised to put the new sim (o2) in and do restore to factory settings via itunes. Did that... doesnt work (just a message saying the handset doesnt support the sim.
I cant get through to orange as they dont recognise my (old) number anymore, so effectively Im stuck! I no longer have an active account with orange as it expired when I switched to o2 on 11th.
Any ideas? - Who I need to speak to? Who can fix it etc. Thank you.
3Gs transferring to O2 PAYG