Check your phone line with a) a new cord between the base and the jack and b) a different phone (I prefer an old cordless phone). If you still get a "line in use" message (alternate errors: fast busy signal or no dial tone), use your test phone at a different jack and determine if the issue persists. If you can, find where your phone service comes in and open the box. If you are lucky and have a fairly new service connection, you'll be able to plug your RJ-11 phone line in and check if there is the problem is at the box. If you can't test at this point, you need to contact your phone company to diagnose if the problem is inside or outside.
If the problem is only with the KX-TG65111 phone, try unplugging the base from the phone line and the cord from the wall jack, disconnecting the base AC power cord (from both sides - phone first) and removing the batteries the handset. After a few minutes, plug in phone line, power cord and batteries and test again. If it still fails, then the phone needs service. These cordless phones are not designed for the home user to service. If the phone is under warranty, contact Panasonic. Otherwise, decide if it is worth having the unit serviced or replacing.
If no phone works at this one jack but does work at another jack, you have a wiring problem at the jack or in the wall to the jack. Try opening up the outlet and check for loose or damaged wires. The jack is either wired directly to screw terminals or punch down terminals. For the screws, it's relatively easy to strip the insulation and retighten the connections. For the punch down style, you will need the appropriate tool. (It's available from many hardware stores in the wiring section.) See http://www.lanshack.com/wire_phone_jack.aspx
for a diagram of the pins in the jack wiring.
If none of your inside jacks work, look at the exposed wiring and check for any obvious damage. Otherwise, you'll need to find the problem in the walls. You may want a professional to do the job.
If the problem is outside, your phone company will fix the probem for you for free. If the problem is inside, they'll fix the problem for a fee.
If you have a DSL line and a filter on the line, check and replace that if it is part of your inside wiring.
I hope this helps.
(I've gotten a line in use error with a DSL filter problem after a nearby lightning strike. Since my filter is inside the service box, my telephone company handled the repair.)