OK, so I borrowed my AVRISP to a friend and he bricked it. I am unsure if it suffered some overvoltage through ISP or did it die during upgrading of the AVRISP firmware itself (damn AVR studio suggests it and firmware programming must be performed with NO other activity on ISP connector but power).
Anyway, my debugging reveals the AT90S1200-4SC inside is working and would gladly talk to the AT90LS8535-4AC next to it, but it won't respond back anything on MISO pin. So manual firmware upgrade is performed but nobody reacts to it.
Has anyone had the same problem with AVRISP?
It seems this part is long gone from Farnell or Elfa, can anyone point me to a drop-in replacement? It seems that the ATMEGA8535L would be nearest, and it even has a 8535 compatibility fuse that would have to be turned on before soldering it in. The voltage range is just 2.7V-5.5V instead of 2.7V-6.0V.
Purchasing the MEGA8535L would cost a bit over 6 euros + VAT, so is it pointless to try to fix this, new AVRISP2 would be like ~30 euros + VAT.