My sister called my cellphone this morning and said she had been trying to call my landline for a few days and was only getting a busy signal. I removed my landline phone from its cradle and tried to dial out. I got no dial tone and the screen on the phone reads "Line in use". The screen constantly reads "Line in use" even when the phone is hung up. The crazy thing is... sometimes I can still use my internet and WIFI and sometimes I can't. My computer and internet is working right now as I am typing this but my telephone still reads "Line in Use" and no one is on the phone.
I went outside to the phone box on the side of the house and disconnected the green and red ring and tip wires from their terminals and tested those wires with a handset and found I was getting a dial tone, but as soon as I connect those wires back to their terminals at the box I get either a busy signal or static.
I have tried disconnecting all of the phones in the house and trying each jack individually with my test handset and all I get is static and no dial tone.
Any ideas as to what may be going on? My phones were working beautifully two days ago and suddenly this is now happening.
I have been pretty handy at fixing things like this myself and most of the time it is something simple that is causing the problem, but this time I am really stumped.

From what your saying the problem appears to be on your side of the phone. Are you using dsl ? If so disconnect all filters and the modem and retry the jacks again with a test phone. Other then that your going to have to trace the wiring as best as you can and isolate each branch circuit.