Neil has spent his dinner time meticulously trying to do what i failed to do last night and that is to solder the two wires together. I failed last night because there was not even any power getting through after I had tried and I thought all hope was lost.
But I thought I would bring it into work today to ask Neil to see if he could use his expertise in this field (he has been known to get a USB mouse cable to successfully power a previously mains powered LCD display!) to fix it or at least confirm whether or not it was kaput.
After a much more professional looking job, Neil soldered the cables together, pointing out that what I thought was just insulation wire was actually likely to be a ground wire, and, miraculously, the power came on! I took it to a dark room, powered it up and on came the LEDs!!!
This was a big step forward from last night and it does look a lot more promising that the current webcam can be resurrected. I cannot test it any further til I get home where I can plug it up to the video input to see if that works. I am hoping that because Neil used the same method to connect the video cable as he did the power (which now works) that it will all work and we can all be saved from spending 100!
Here is a pic of Neil hard at work on the lambwatch webcam:

A big thank you to Neil. If it does work tonight it will be such good news.