I don't know that much about whether the chips can die or not, but if you can see some semblance of a drive when it's hooked up you should be able to mess about with it in any number of drive utilities.
Haven't ever had to do so myself, but I've heard of it being done.

I just learned a whole lot from this 'flash drive roundup' article: it's 28 pages long!
(no answers there to your questions, but a good intro to the guts of flash drives for the likes of me)