I got my sx120 dead by installing sx120is-100b-1.1.0-full_BETA_rev_840.zip
Maybe. Or maybe not. In know its frustrating but lens errors are reported to be the most common failure for digital P&S cameras. While its possible this is related to CHDK, it may have happened anyway. All it takes is a little bump. Statistically, there will be some failures while people are using CHDK. So far, nobody else has reported the failure mode you describe though.
Google "sx120 lens error" and you get hundreds of hits.
This page is the best one I've seen on the topic of what to do about it :
Fixing lens error on digital cameras. When I bumped the lens on my SD940 and got a lens error while playing with CHDK, I ended up going all the way to fix # 6b before my camera started working again. You have to make the call about what you want to do.