I think you simply had a bad update experience and OneCare "broke." It sounds like you uninstalled manually and then installed and activated once again. Is it in green status and running without errors? Then you should be good to go. If not, please contact support.
How to reach support - http://forums.microsoft.com/WindowsOneCare/ShowPost.aspx?PostID=2421771&SiteID=2
If it fails to validate your subscription, select the option that you are using a trial or beta copy and you can proceed to email support without validation once you've signed in.
-steve