Something has gone wrong, should I stick it out or leave?

Hi I'm in a bit of a strange position and would like a bit of advice; the situation is a little complex so please forgive the long post as I try to explain.

I started my job about 2 1/2 years ago the first 2 years or so were great, I felt like I was making a contribution, was learning a lot and got on well with most people. Throughout my time I've been move from one project to the next, never seeing the beginning or end of a project, and was a sort after resource, (so I was told). My prospects looked good for promotion, everything was great and I really enjoyed my work.

Two of the projects I was working have had some issues: the first serious the second not so serious. On the first project it was not something I could have controlled. On the second project I simply did what was asked of me and I was moved to a third more important project and told to stop all work on the previous project despite the fact that there was no one to do the remaining work that needed to be done on the second project.

My line manager at the time told me at the time that neither of the issues these two projects suffered were my fault. However, I'm now suffering serious damage to my reputation: people seem to have completely changed their reaction to me as new problems come up on the two projects I was on; they seem to hate my guts basically.

(Just a side note the manager of the second project had behaved somewhat strangely: he'd claim complete ignorance of technical issues but told me not to do things that I thought should be done; it felt like a set-up but I thought I was just reading too much into it. Now it feels like I may have fallen victim to "Setting up to Fail".)

This combined with the stress of the current project I'm working, which has very tight time pressures, has lead me to completely lose faith in my own abilities; I felt that I was incompetent but couldn't place what had gone wrong. I basically fell apart under the strain of the negative work environment and general work load and had a talk to my, (now ex), line manager about how I was feeling and asked for a critical peer review so I could determine whether or not I was competent and let me know areas for improvement. The outcome of the review came back wholly positive, which left me a little confused. I seem to be getting completely mixed signals: treated with contempt and when I ask for feedback on how I'm doing it is as if things couldn't be better. What is going on??

Now in just a few months my dream job has become a nightmare. As I've just moved into a job poor area for this job simply leaving for a new job is not so simple; I'd have to move back from whence I came. So I'd like too know whether or not I can and should stick it out or just leave? Can I recover my previous position?

(My confidence is shot to hell now and I'm completely confused, so I'm not sure I even have the strength to go through the job search process at the moment.)