No service My phone started dropping calls last week and now it won't connect at all. The service bars are full, but there is a picture of a phone with a red line crossing through it in the top right corner for the screen. My SIM card works in my old phone no problem. Please help!

If you have ample signal then its probably your phone. I had an old phone that would start squealing when I talked on it for more than 2 minutes. Verizon should be able to give you a different phone if you have insurance.

Contact your service provider and ask them to send settings to your phone. Its quick and free.

That means your cellular data connection is barred. Ask your operator to open it and configure your settings of your mobile.Your network operator will charge for it.

First off please access your sd card via computer and make some space on the card . Its always ideal you keep 20 % space free on the card .
Now please do a hard reset of the phone ( considering that you are on default windows mobile 6.5 )
Go to

1. Menu > All Settings > System > Clear Storage.
2. Enter 1234.

OR

1. With your phone powered off, press and hold the VOLUME UP and VOLUME DOWN buttons.
2. While holding the volume buttons, press the END/POWER button briefly and then release it.
3. When you see a warning message on screen, release the VOLUME UP and VOLUME DOWN buttons.
4. Press the VOLUME UP button to perform the reset, or press any other button to cancel the reset.

NOTE : PLEASE TAKE A BACKUP OF YOUR DATA , USE PIM BACKUP,

you may contact the service provider.......

I called HTC Touch customer support. Found out that using soft reset button on bottom right of phone corrected that problem. Also found out that another problem I've been having - not receiving calls when phone in sleep mode has been partially corrected by new software. I say partially because we have 2 of these. My wife's phone is now working reasonably well but mine still misses calls. I think my problem could be related to these phones not having very good receiving strength signals vs other ones I've had. I miss calls while sitting at my desk at work. Never had this problem with other phones in same location. I guess the internal antenna just isn't as good as other phones. I also drop a lot more calls with this on the highway than with other phones - that's why I suspect the phone and not the service provider.

signals bar is full but call did not cannect when my phone is in pocket or at some distance

You probably have the speaker membrane broken. Just plug a headphone and test to see if the rest of the device is working correctly.
You can find the replacement part here:

http://www.piezas.biz/epages/wwwpiezasbiz.sf/en_GB/?ViewObjectID=56222

GO TO NETWORK SETTING N SET YOUR BANDWIDTH

Yes your antenna is more then likly shot... i would advise going to radio shack and getting another one. =) or calling your provider if the phone is under warranty and getting a new one =) Rate me buddy =)