Resetting the phone deletes
all data, including downloaded applications, and resets the phone back
to its initial state. Press HOME > MENU, then tap Settings >
Security > Factory data reset. On the Factory data reset screen, tap
Reset phone and then tap Erase everything. To reset the phone using
phone buttons, with the phone turned off, press and hold the HOME, END
CALL/POWER, and BACK buttons. The reset process will start after a few
seconds
this issue appears to have nothing to do with how much space you actually have, whether it's on the SD Card or on the phone - it appears to be a big HTC Mail bug that's just crushing my phone as well, no matter what I purge or reset - there is a long thread here about it -forum.androidcentral.com/.../12215-htc-mail-memory-leak-bug-phone-storage-getting-low-2.html
it's very frustrating and will probably cause me to take back the phone
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