When a lieutenant colonel uses the phone, answering or calling, how should they address themselves, lieutenant colonel or colonel?

We used to actually refer to those as "telephone colonels". It's very misleading. I normally answer the phone identifying myself as Sergeant. This is the appropriate address for a SGT through MSG. However, it has the same potential for misunderstand as a SSG may now think they're talking to a SGT when they're talking to a MSG and there are times where that SSG may overstep their bounds thinking they're senior to the person they're addressing. The key here is to treat everyone with the same amount of respect. Also, answer the phone with your full rank.

When I answered the phone, I always did so as "Lieutenant Colonel McCarty." However, I was saddened to see that SecNav finally caught on and recently mandated that when calling Navy phone numbers, Marine officers are now required to say "This is Marine Captain_____ calling." Boy, we used to get so much more cooperation when I was at, e.g., Subic Bay." I also really appreciated Captain Doc Lamb, USN, who, back in the day when Navy officers LCdr and below were referred to as Mr, required his officers in USS Newport, to call Marine officers above 2d Lieutenant by their correct title. (In the old Corps, 2dLts were Mister and 1stLts were Lieutenant.). But then, Captain Lamb had once held the much higher rank of PFC, USMC at a little flyspeck in the Pacific called Iwo Jima, so he understood.

I address myself as Lieutenant Colonel - I almost feel awkward when somebody addresses me as Colonel. There's a big difference between the two ranks and I never want to misrepresent that I'm the higher rank. Only thing is, I get irritated that my title is so long I feel like it takes forever to get to my name and I fumble sometimes trying to say it really fast.

Sir, personally I think it depends on who's calling.  If they're calling your cell phone you've got the edge with caller ID coming in to play.  I'd say that if you know the caller, the abbreviated "Colonel ________" should work.  However, if the call was from a superior or an unknown number I'd probably up the formality and use full rank.

He's a "telephone Colonel"! When I was LTC, that's how I self-identified. When I was O-6 then I was Col.

I think the main guiding principle is to show respect and consideration for the person with whom you are speaking on the phone, so as to not give him or her misinformation or make them look or feel foolish (regardless of relative rank).
It is a matter of both courtesy and professionalism.
I do (personally) feel it is bordering on misdirection to introduce yourself on the phone as "colonel" when you are a Lt Col. It may be simple pride, but it's a slippery slope.
When the rank is clear by context, such as in an in-person meeting of people who are acquainted, it probably matters little... But I always err on the side of "referring up" to others, not myself.
My 2 cents. That and $2.97 will get you a cup of coffee at Starbucks...
UNCLE

I appreciate your frustration Colonel aka LTC and I agree with you,on the other hand once you leave the military and join the civilian work force, the best advice I can give is such irritants that only offend the ego need to be left behing in the military. RLTW!

And you all think the Navy is hosed up. Oh wait , we have Commanders, Lt. Commanders, Vice Admirals, Lieutenants, Lt. Junior Grade, and confuse everyone with our Captains and Lieutenants.

Or how about being an Air Force Captain visiting a Navy installation and calling someone. If you just say Captain they assume your are a Navy O-6 instead of an O-3 in the Air Force.

Again we see the Army identity problem. Call a duck a duck. We call all ranks of Sargent "Sargent". All General are "General". 2LT and 1LT are LTs. The Corps is a bit tighter on using full rank when identifying Marines. And for all our sake, don't use pay grade!