This is a pain, and I keep forgetting the cause. So to save myself the trouble in future, here it is..

It’s simple – another device has the IP address that your DHCP server is handing out to the SPA504g/spa508g phones, and so the phones are refusing to accept this IP address.

The Cisco SPA phone is being handed e.g. by your DHCP server, but another device is using this IP address already. It may be the DHCP server that is at fault. In my case, Windows 2008 DHCP server does not have a record of some of the existing IPs in use / previously leased. Perhaps the SPA phones are not honoring the lease expiration time and failing to renew, just continuing to use an IP address, and then DHCP server thinks the IP is free to hand out to another phone when it restarts or is unplugged and plugged back in. There’s a DHCP server configuration option to do an ARP check or something before handing out a lease.. might be worth looking into that.

Look in your DHCP lease table, find the MAC of the offending phone, have a look what IP the DHCP server thinks is has leased to the phone. With the phone powered off, check if you can ping that IP. If you can ping that IP, then you know that the DHCP server is OFFERing out an IP address that is already in use.

If the DHCP server is Windows, and the scope is e.g. –, then a quick fix is to temporarily change the scope range to something like  –, thus forcing the DHCP server to hand out a different IP address than the original that it was handing out. The phones will then work, and then you can set the scope back to the original range. The DHCP server will record the lease and hand out that new IP address in future.