Checking the schematic, the TX/RX leds are driven directly by the atmega16u and are not connected to the TX/RX lines of the Arduino. That would seem to indicate the 16u has a problem so it's a good place to double check. These lines and the lines the run to the TX/RX of the 328p run from pins 8 - 11 of the 16u. I assume that this ran previous to the fatal 'surgery'? I don't suppose you loaded something simple, like the led flash program before surgery? Just curious, are you hard wiring it to something?

Checking the schematic, the TX/RX leds are driven directly by the atmega16u and are not connected to the TX/RX lines of the 328p. That would seem to indicate the 16u has a problem so it's a good place to double check. The lines that run to the TX/RX of the 328p run from pins 8 - 9 of the 16u. I assume that this ran previous to the fatal 'surgery'? I don't suppose you loaded something simple, like the led flash program before surgery? Just curious, are you hard wiring it to something?