I cancelled SIM unlock and now I cannot unlock the device
Finally solved it.. I have found this ansewer by yy502 on cyanogenmod

1) you've missed the PIN prompt when phone starts up. no phone calls.
2) go to "location &amp; security settings"
3) go to "set up SIM card lock"
4) un-tick "Lock SIM card"
5) enter your PIN as required
6) your phone will now connect to the mobile network. full bars!!
7) re-tick "set up SIM card lock" if you still want to protect your phone using SIM card PIN
8) enter your PIN as required