Had this problem to... I thought it was a Yahoo Interop specific thing first, because it happened with an Yahoo address for me... but looks like it's a general WLM server issue.
Let the person(s) who see your status wrong log out and back in. That fixed it for me. But I can imagine it's a bit much to tell everyone who is online on your contactlist to reconnect. The Messenger servers are having so many problems last couple of weeks
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