Default [Q] Camera and flash don't work

I have an N1 and the camera and flash suddenly stopped working. I'm also burning through battery life in about half the normal time. I suspect this is a software issue.
The phone is rooted but the ROM is stock. Currently have version 2.3.6, Build number GRK39F.
I've heard that flashing back to froyo will fix this problem.
My question is 2 part.
How do I flash back to froyo from gingerbread?
Has anyone experienced the flash/camera terrible battery life issues and do you have any suggestions.

Please keep in mind that I'm just a step above a noob. I know enough to be dangerous.