The local directory is missing from the menu on the cisco 7942G phones which was recently installed with the cisco 2821 package. The service was available during initial setup and has disappeared about 2 weeks later. I have tried disabling/enabling the directory service under telephony-service and re-created the config files for all phones, with same results. http server is enabled and I am able to access and configure settings on the GUI.
youve probable solved your issue by now but if not
I was having the exact same problem , the fix that i found worked for me was under the ephone set "type 7942" and restart the phone
i would also delete from telephony-service the following line
and any manual entries you have added
reason i say this is because i found that leaving in these lines somehow only allowed the phone to find manually entered names & numbers, taking out the lines allowed my phone to automatically find all names & numbers assigned to an ephone