While I can't identify the "real" solution, I would unplug the offending phones, power down, wait 30 seconds and power up.

Then plug in one phone and see if the light comes up. Who knows what screwy things make the processor go nuts, but rebooting without those phone plugged in is the first thing I would do.

If they still show up as busy then you have bigger problems than a temporary glitch.

THE Bracha, old blond specialist in Rube Goldberg solutions.