Hi Daz,
Give this a whirl. It will remove the "jailbreak" but if it works then just go to "jailbreak me" from the iPhone to put it back. You then need to sync to iTunes again to restore the missus's data. if all of this doesn't work you phone may be recoverable but I would physically have to have it to attempt repair! You may loose the network unlock bit as well, but it's worth doing to recover an otherwise "useless" iPhone
HTH
1. Disconnect the USB cable from the iPhone, leave the other end connected to your Mac/PC
2. Launch iTunes
3. Press and hold the Home and Power button on the top of the iPhone to turn off the device
4. Press and continue to hold the Home button while you reconnect the USB cable to your iPhone, this will cause the iPhone to turn on
5. Continue to hold the Home button until an alert message in iTunes appears that an iPhone in recovery mode has been detected
Now that the iPhone is in recovery mode, you must restore the device:
• From iTunes, look under the “Summary” tab
• Click on the “Restore” button within iTunes
This will wipe all files, settings, and apps from the iPhone, including the passcode. When the restore is finished, the iPhone will be at the factory settings. At this point you can choose to start from scratch or to restore the iPhone from a backup.