I uploaded a largish sketch ~15kb to Arduino Nano v3.0 (clone) and that left the board in an unusable state. When connected to USB, a power LED goes on immediately and 1-2 seconds later the yellow "L" starts blinking really fast.
[Here's the board I use][1], it's a cheap clone, but it worked really well before today.

Now, when I try to upload a new sketch I get an error:

 avrdude: stk500_recv(): programmer is not responding


I tried making and ISP programmer out of genuine Duemilanove, using [nano's ISP pins][2] and tried following [official instructions][3] (didn't use any capacitors/resistors).
Either way when I click "Burn Bootloader" result is the same error:

 avrdude: stk500_getsync(): not in sync: resp=0x15

I have connected "debug" leds to D7,8,9 and heartbeat fades in and out in idle, others stay dark.
When I click "Burn Bootloader" all leds go dark then it does few quick blinks on 7, then similar pattern for 8, and then heartbeat resumes. Sometimes this sequence is repeated twice.

I also tried editing preferences.txt to bypass bootloader, but that didn't help.

**How do I restore this board or do a low level reset?**
It seems to be in some failure mode, with pin 13 oscillating, but I don't know what that means.


 [1]: http://www.ebay.com/itm/161091236453
 [2]: http://letsmakerobots.com/content/make-arduino-isp-programmer
 [3]: http://arduino.cc/en/Tutorial/ArduinoISP