As I figured the bootloader was broken I borrowed a programmer from school and tried to reinstall it. Now the bootloader seems to be stuck in a reset loop. It just keeps flashing the P13 LED every second and won't communicate with the IDE at all. Now I get:
avrdude: stk500_recv(): programmer is not responding
avrdude: stk500_recv(): programmer is not responding
Can you measure the voltage on the 'reset' pin? (It's also pin 1 on the ATmega168).
My multimeter reads 4.9V
Is anything connected to the board besides the RS232 and DC cables?
No. I was writing a parser at the time.
When you click 'upload' does the '13' LED (near the MAX232 chip and serial connector) briefly flicker or blink?
I don't think it was flickering.
What kind of surface is the board resting on? Look for stray pieces of metal on the bottom of the board.
It was resting on the anti-static plastic bag is was shipped in. I don't see any metal shavings on the bottom either.
Do you have another Arduino (like) board around?
Nope, this is my first and only Arduino.