Hi, after searching high and low I've found the following on Yahoo Answers, and it worked for me:
1. Go into the specific mailbox that has been showing this behavior.
2. Tap "Edit" on the top right corner of the screen.
3. Tap "Mark All" on the bottom left of the screen, followed by "Mark as Unread". Give the phone 30 seconds to a minute to process this. Your phone will now show a *lot* of unread messages.
4. Repeat, now marking everything as read.
It's probably better to apply this fix when there are no actual unread messages, as this will reset the count to zero.
Hope this helps.