Trying to 'connect' the Nokia E70-1 to the entreprise server:

Got the right (latest) BB connect for my firmware and handset:
S60PR2 (6.40.0)_10.sisx on E70 RM-10 with SW 2.0618.07.10 (as per Nokia release note 6.40.0 from 27th Oct 2006)
The only way to upgrade to S60PR3 (7.1.5)_6.sisx would be by having the handset firmware changed to SW 3.633.09.04 which I read is tricky.

The software installed fine on the phone, the handset connected fine to GPRS and registered on the network (confirmation SMS came immediatley), the BB logo is 'live'.
The Vodacom service provider service book was received on the handset when I registered the new PIN on the website.
An activation email arrived in the mobileemail inbox confirming and welcoming me to the service. Receiving and sending emails via the two ISP email address through the ISP mailbox works fine.

Now the problematic BES side:

Got the latest Symbian Nokia Desktop connect version:
SymbianNokiaInstaller2.1.1.22 Nokia Desktop Connect
using Nokia PC suite version 6.83.14.1 and USB cable to connect.
our company is using Notes 7.0.1
our BES server is version 4.1.29

Symptoms:

When the connecting handset via USB cable and PC Suite to the BB Desktop Connect Software after the initial initialzation the PIN comes up as UNKNOWN on the BB desktop software and our administrator confirms that on the BES side no PIN appears at all on my account.
When I click "connect", it states that the email account is using a pin of unknown type, I move the mouse to generate encryption, it uploads the calender and afterwards, on the BB desktop, the pin is still "unknown type".
When I do the same but bypass the calender upload step, the PIN correct appears - however no wireless reconcilation happens with the handset,
worse even: a couple of minutes later, when re-opening the BB Desktop Connect software to double check the PIN is gone and again says PIN is still "unknown type".

Here are my hypotheses (in order of strength):
1) the security layers in place either at Notes level or BES level (security policies) do not allow for the PIN to register properly with the BES (this might have to do with the fact that BB connect device is considered 'less secure' as contrary to the RIM devices the lock-out functionality can be circumvented...)
Trying to set my account to be part of the empty or anonoymous policy (with no security) - could be a fix.
- I can send you the details of the current policy on my handset: IT policy name = Default; Latest IT policy update = 11/06/2007 16:47
2) Notes 7.0.1 and SymbianNokiaInstaller2.1.1.22 Nokia Desktop connect have an issue (I read about certain versions of Outlook 2000 and Nokia Desktop Connect not being compatible) - the fact that I do not get the 'PIN unknown' message when I NOT import the calendar entries on connecting the handset to the desktop does hint at something there...
To fix I could try and find older versions of SymbianNokiaInstaller2.1.1.22 (they go back to .16 apparently) but that is all a bit of a longshot...
3) Change the firmware on my phone and upgrade to S60PR3 (7.1.5)_6.sisx ... I would only go that route if the BB was not functional at all, which is not the case as the ISP pert works fine. But I will check with the support people of the competing network in SA (MTN) who do support the E70 on their network. (Vodacom only supports the E61)

Any other ideas?