sunspark,
The 6xx series of SIP Response codes are Global failure response codes. The code 603 means that one side of the party, typically the phone itself, is not available or unwilling to take the call; I have seen this will call screening. As there is probably no other path for the call to take, ie voicemail, then the server probably sends a busy signal and disconnects.
I would look at how the application 'phone' is setup to handle calls since it seems as though it is able to logon to the Mitel and everything works fine with your xLite phone.
Thanks,
TE