I think the key to this issue is "an expansion card was installed". Was it an 8-port Extension module installed on a single cabinet, or was it a second 1232 "sic" connected to the first cabinet? If it was the first, was is installed on the middle or top slot? Even more, are the phones on the new module working at all, and if so, what intercom numbers are they?

It might be as simple as "Off hook Preference" is set to an idle line, and therefore 165 is going out on a co line and going nowhere....