two things to try
1. factory reset the handset
unplug handset
hod down 1 and plug in the handset (keep holding 1 until you get "configure phone"
press * for yes to configure phone
press # for no until you get to tools and features
press * for yes to tool and features
press # for no until you get to restore defaults
press * for yes to restore defaults
press * to confirm
2. setup dhcp options 128, 129 and 130 (handsets with old firmware didnt use 125, this was more an issue with the 5212 and 5224 handsets, once firmware was upgrade they then use 125)
128 = TFTP server = ip address of you controller
129 = Call Server = ip address of you controller
130 = IP Phone Identifier = MITEL IP PHONE
I have a couple other things, but give them a try first.
If that doesnt work, how far does the phone get (eg waiting for DHCP, or does it get to the point of asking for the pin etc)