I'm a colleague with Tim above, so hopefully can add some debug information here that will be useful for you.
Firstly, I'm working on a different iPhone. It's a brand new iPhone V4.3.3 installed and I experience a similar problem - but intermittently.
Also, in terms of context, I used the version of Ushahidi iOS available in the app store about a week ago, and have updated to the latest version in the app store which updated to my phone yesterday - the problem has occurred with both.
At present I am at home, and the issue doesn't present itself (too often, but does occasionally), however when at my place of work (about 35 miles away) the issue certainly does present itself regularly - actually, mostly.
The config at home is the iPhone mentioned above iOS 4.3.3 with mostly a GPRS connection. It works ok with either location services ON or OFF in the iPhone settings. This config appears to work fine and is consistently ok.
I can't be definitive at present as to when it causes the problem (i will give better attention next time to the exact config), but when it happens it is quite immediate. ie. when you press the new report icon on Ushahidi iOS, the blank input form appears, the gps icon (arrow upper right of status bar on iPhone) appears, and a curious (not sure what it is) rotating circle appears beside the gps icon - attempting gps fix perhaps?. I don't know what that means or whether significant or just a coincidence. What I can say in terms of the config is that it is usually repeatable when I am at work where I would have 3g available to my iPhone.
Does that mean that a combination of 3g plus gps seeking a co-ordinate fix initiates the issue? Perhaps? But again, I can't be definitive at the present point.
I will continue to try and update the specific conditions as soon as it reoccurs on me.
Much appreciate the efforts to resolve this guys and by all means request any tests that we can assist with - we'll be happy to oblige.