If you have an ISP programmer or another Arduino (Uno, Nano, Mega ... using ArduinoISP sketch) you can try to upload a program via the ISP header. This should work even if the FTDI chip is dead.Quote
Is there a way i cant tell whether or not the microcontroller is functioning properly?
Check if your PC detects a USB port when you plug in the Sanguinololu. If yes, chances are that the FTDI is still ok, if no ... :(Quote
Also is it possible the ftdi chip was fried along with the 7805?