If the dampers are shot, they will usually leak. I haven't heard of them losing damping, but it is certainly possible.

If they aren't damping; bottoming out and bouncy, it is possible that they are worn out. It is also possible that (since your system isn't working properly) they have air in them, which doesn't damp at all, would be pretty much like a car without shocks. Any air in the shock will cause a loss of damping, and could even give you a thump when the air is out of the chamber and the first of the fluid hits the valve. It is possible if you had a sphere/accumulator failure that the pressurized nitrogen from the failed accumulator(s) has made its way into the damper or dampers.

Also, the system does rely on some pressurization (via the leveling pump and valve) to keep the fluid in the dampers from boiling/cavitation, if your system isn't working then the damping (especially jounce) can suffer.

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Gone to the dark side

- Jeff