How can I trace and troubleshoot phone lines?
Those tone generators are fantastic tools for tracing data cabling and phone cabling - but they also have several modes on them.

One of the modes is for tracing the cable through the wall, so the device will beep if it's in the general vicinity, so that you can know where abouts it is without having to have contact with it. However, this is not so great for verifying which cable is the one you've got it hooked onto when you've got a bundle of cables.

For that, there's usually a 2nd mode which will only beep if you come into direct contact with the wire.

The first point of call would be making sure that you've got the tracer set to the correct mode so that it will only beep if you're in direct contact with the wire.

If it's still beeping and in that mode, then you've got a short somewhere, which will be why the cabling isn't working. It might be worth pulling it out and replacing it if you're in a situation where that is possible (your ADSL Sync Speeds might go up drastically if you do that too).