Iphone 3.0 upgrade Mail Application Not Working 3G

Greetings,
After upgrading to 3.0 software, all applications seem to work, with some slightly longer loading times....except for one!
The one application that will not work...MAIL
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Upon launching mail, the application will load show my inbox and try to retrieve mail. Usually within 10 seconds it kicks back out to the home screen. Other variations of this problem are not loading the mail program at all as well as loading the mail app accepting some input, then black screen to home screen reload.
The only other variation of this was once mail started, I tried to hold my finger on the screen and scroll. Wait until the application was done checking for mail. Up in the top left corner of the screen the working or loading icon is still in action. As soon as I let go of the scrolling, I get kicked out. Last variation on this theme was the upper left loading icon NOT occuring, I release scroll and then kicked out of mail application.
I tried turning off each individual mail account (I have three set up, hotmail, gmail, .mac). I also tried turning all mail accounts off. I tried turning on and off push and fetch features on each individual account and running mail.
Absolutely NO luck in any variation.
Turning the iPhone into AIRPLANE mode allowed me to run mail, read emails. I even thought perhaps I was able to delete messages. Once I turned AIRPLANE mode off, and relaunched mail app, all emails were reloaded and I was kicked out.
I have had no problems with mail app in the past in any fashion. Updating to 3.0 has locked me out of my most often used application.
I have been searching forums and Google all day with no luck to anyone else stating this problem. The software was only released today, so perhaps not everyone has used each application throughly yet, or have not posted their problems.
I have tried turning device on and off, hard reset, soft reset, power down, plugging in, syncing.
The one HUGE problem I have is that I backed up before upgrading, BUT, Apple does not allow us to create NEW backups. So, without me knowing, when I hit SYNC to try to update, it overwrote my 2.1 backup.
(Which by the way is so frustrating. Why can we not say create new backup, rename them, choose which back up to restore from?)
Alas, I am stuck in purgatory with no access or clear idea how to proceed in getting mail running again.
Has ANYone else had anything similar to this, or possibly found a work around?
Your input is much appreciated,
Cheers,
E!
Intel Powerbook Mac OS X (10.5.7)