This could just be superstition, and I do not know what level drivers Daemon installs, but I and many others have reported drives going dead after using Daemon tools (or at least, the SPTD driver that comes along with it). How long after installing Daemon did your drive stop working?
It might be this issue you're running into (http://support.microsoft.com/kb/314060
), that Daemons really does FUBAR drives, or pure dumb luck.
Most people never seem to have problems with it though.