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I think I have the fix for this issue. Apparently when apple shipped the Iphone 4 they shipped it with 2 different SIM cards. One short SIM card and the other a bit longer. The longer SIM card touches the SIM tray which causes it to ground out. All you have to do is go back where you bought it and request a short SIM card. This is an image of the large and the small SIM card.