I2C Issue

I agree, it does sound like software is the more likely cause.

The error you are getting (wrong ID) seems to suggest that both boards are still talking and responding to their respective addresses.
If I had to guess the problem has something to do with getting replies from the boards, not sending them commands.

What do you get back if you run this command:
sudo i2cdetect -y 1

There is definitely something wrong there, usually when we see that kind of error it points to a wiring issue.

Could you re-run the command with nothing at all connected to the GPIO pins?
If it stays the same then the problem is definitely Pi side.

It could be worth trying, it does seem like the problem is somewhere with the Raspberry Pi.

If that does not work try the GPIO pin test from this post:
https://www.piborg.org/comment/5284#comment-5284

All of the pins being set to IN after running the pintest is normal, a reboot should put the GPIO pins back to default modes.

The pin error is more worrying, it suggests that the GPIO pin used for the I2C data line is not working correctly.
I suspect that the BrightPi works because the code is only getting the Raspberry Pi to send data to the board, not read values back from it.

Given this half-working I2C it might be possible that it is a software issue, but it would seem more likely that the pin has become damaged in some way.

If you do not need to read values back from the PicoBorg Reverse you could try and get it to ignore the ID error and continue anyway.
This may allow you to control the motors still, or it might not work at all.

To try this open PicoBorgRev.py in a text editor like nano.
Look for the Init function:

    def Init(self, tryOtherBus = True):
        """
Init([tryOtherBus])

Prepare the I2C driver for talking to the PicoBorg Reverse
If tryOtherBus is True or omitted, this function will attempt to use the other bus if the PicoBorg Reverse devices can not be found on the current busNumber
        """
        self.Print('Loading PicoBorg Reverse on bus %d, address %02X' % (self.busNumber, self.i2cAddress))

        # Open the bus
        self.bus = smbus.SMBus(self.busNumber)

        # Check for PicoBorg Reverse
        try:
            i2cRecv = self.bus.read_i2c_block_data(self.i2cAddress, COMMAND_GET_ID, I2C_MAX_LEN)
            if len(i2cRecv) == I2C_MAX_LEN:
                if i2cRecv[1] == I2C_ID_PICOBORG_REV:
                    self.foundChip = True
                    self.Print('Found PicoBorg Reverse at %02X' % (self.i2cAddress))
                else:
                    self.foundChip = False
                    self.Print('Found a device at %02X, but it is not a PicoBorg Reverse (ID %02X instead of %02X)' % (self.i2cAddress, i2cRecv[1], I2C_ID_PICOBORG_REV))
            else:
                self.foundChip = False
                self.Print('Missing PicoBorg Reverse at %02X' % (self.i2cAddress))
        except KeyboardInterrupt:
            raise
        except:
            self.foundChip = False
            self.Print('Missing PicoBorg Reverse at %02X' % (self.i2cAddress))

        # See if we are missing chips
        if not self.foundChip:
            self.Print('PicoBorg Reverse was not found')
            if tryOtherBus:
                if self.busNumber == 1:
                    self.busNumber = 0
                else:
                    self.busNumber = 1
                self.Print('Trying bus %d instead' % (self.busNumber))
                self.Init(False)
            else:
                self.Print('Are you sure your PicoBorg Reverse is properly attached, the correct address is used, and the I2C drivers are running?')
                self.bus = None
        else:
            self.Print('PicoBorg Reverse loaded on bus %d' % (self.busNumber))

Change foundChip to be True above the error you are seeing:

                    self.foundChip = True
                    self.Print('Found a device at %02X, but it is not a PicoBorg Reverse (ID %02X instead of %02X)' % (self.i2cAddress, i2cRecv[1], I2C_ID_PICOBORG_REV))

If you now try and use the GUI it should still display the error, but continue anyway.
If the I2C sending still works you should then be able to control the motor outputs.

That is right, the servos should still work with the same alteration, but the ultrasonics will probably just come back with a reading of 0 constantly.