I've had a few of these type boosters go out, but not in the way you explained. The most common problem I have experienced is the wire leads breaking off from the PCB under the shrink wrap resulting in no voltage (which is repairable if you dont mind cutting off the shrink and resoldering the leads. I prefer to redo them with silicon 22 ga wire). I have had a couple go bad and then only send out 3 volts when attached to a 4.2 volt pack, but never one that boosts the voltage like yours did.
