guys - thanks for help. I have things partially working but am having dial tone problems..
inside block photo is here (sorry its fuzzy but this is a confined space above a drop ceiling and its tough to get the phone to focus in the dark):
»s1.postimage.org/688grmmbz/photo ··· hoto.jpg
but my outside NID is locked so I cant comment on what it looks like in there.
my cat5 wire is coming up from bottom right of photo - its the white/blue and light blue wires. it goes from the ONT to the block, it does NOT go out to the NID.
I think I did what you recommended, and connected the wire coming from the NID directly to the protector block (its the one coming from the left, with yellow and black wrapped around and green/red also connected to the block).
the third wire coming in is for our alarm. it has white and orange connected (it also had red button splices that are since cut). this looks wrong to me, because I think my alarm has to be first in line (ie ONT wire should be spliced to this)
all of the inside house wire is attached at the top of the photo. all of those phones work and sound fine.
for the upstairs phones (through NID) I can get dial tone, but it has a fair bit of noise on it - kinda like a low frequency machine gun. less static during a call.
any suggestions on getting rid of the noise (I know other than calling vz which I will likely do regardless at this point).
oh, and I forgot to say several times above, thanks!