>> everything used to be just fine when I used 3.8 <<
You still didn't give any specific information on the make/model/os of
your device nor give the exact version of activesync you are using...
please do so to avoid getting irrelevant information.
It's not clear if the phone you are referring to runs WM5 or earlier
versions.
If your device synced with AS3.8 it has the 2003se or lower os and since
there is no advantage for it with 4.x plus problems (such as yours) the
best option is to revert to AS3.8
Unfortunately, you have to manually remove some 4.x componets... think
Chris's page at
http://www.pocketpcfaq.com has details on this.