Index: channels/chan_sip.c
===================================================================
--- channels/chan_sip.c	(revision 47419)
+++ channels/chan_sip.c	(working copy)
@@ -1308,7 +1308,6 @@
 
 /*--- Device monitoring and Device/extension state handling */
 static int cb_extensionstate(char *context, char* exten, int state, void *data);
-static int sip_devicestate(void *data);
 static int sip_poke_noanswer(void *data);
 static int sip_poke_peer(struct sip_peer *peer);
 static void sip_poke_all_peers(void);
@@ -8019,9 +8018,9 @@
 	/* If they put someone on hold, increment the value... otherwise decrement it */
 	if (hold)
 		peer->onHold++;
-	else if (hold > 0)
+	else
 		peer->onHold--;
-
+	ast_log(LOG_NOTICE, "onHold now: %d;  hold arg was: %d\n", peer->onHold, hold);
 	/* Request device state update */
 	ast_device_state_changed("SIP/%s", peer->name);
 
@@ -14885,18 +14884,16 @@
 				/* check call limit */
 				if (p->call_limit && (p->inUse == p->call_limit))
 					res = AST_DEVICE_BUSY;
-				else if (p->call_limit && p->inUse)
+				else if (p->onHold)
+					res = AST_DEVICE_ONHOLD;
+				else if (p->inRinging && p->inRinging == p->inUse)
+					res = AST_DEVICE_RINGING;
+				else if (p->inRinging)
+					res = AST_DEVICE_RINGINUSE;
+				else if (p->inUse)
 					res = AST_DEVICE_INUSE;
 				else
 					res = AST_DEVICE_NOT_INUSE;
-				if (p->onHold)
-					res = AST_DEVICE_ONHOLD;
-				else if (p->inRinging) {
-					if (p->inRinging == p->inUse)
-						res = AST_DEVICE_RINGING;
-					else
-						res = AST_DEVICE_RINGINUSE;
-				}
 			}
 		} else {
 			/* there is no address, it's unavailable */
@@ -14908,6 +14905,8 @@
 		if (hp)
 			res = AST_DEVICE_UNKNOWN;
 	}
+	ast_log(LOG_NOTICE, "sip_devicestate(%s) returning %s call-lim=%d, inuse=%d, onHold=%d,  inRinging=%d\n", 
+			host, devstate2str(res), p?p->call_limit:-101, p?p->inUse:-101, p?p->onHold:-101, p?p->inRinging:-101);
 
 	return res;
 }
Index: main/devicestate.c
===================================================================
--- main/devicestate.c	(revision 47419)
+++ main/devicestate.c	(working copy)
@@ -117,11 +117,22 @@
 
 	if (!chan)
 		return AST_DEVICE_UNKNOWN;
+	
+	switch (chan->_state) {
 
-	if (chan->_state == AST_STATE_RINGING)
+	case AST_STATE_RINGING:
 		res = AST_DEVICE_RINGING;
-	else
+		break;
+	case AST_STATE_BUSY:
+		res = AST_DEVICE_BUSY;
+		break;
+	case AST_STATE_DOWN:
+		res = AST_DEVICE_NOT_INUSE;
+		break;
+	default:
 		res = AST_DEVICE_INUSE;
+		break;
+	}
 	
 	ast_channel_unlock(chan);