Dear Chris,
The information you provide is not enough to make any speculations what happened with your ICD2.
It worked but now doesn't work may means anything: broken cable, power supply problem, burned ICD2, how could we help you based on this information?
Tell us what you did when the ICD2 stopped working, does it connect to USB when you plug it, what selftest show?
Verify failed may also mean just weared PIC on the target i.e. broken PIC which can't be programmed anymore, why blame the ICD2 for this?
Changing the onboard PIC with the firmware is the worst thing you could do if you have no glue what to do. What did you put as replacement: blank PIC? How do you expect ICD2 will work with the new PIC?
Best regards
Tsvetan / Olimex