2

Are there such situation(s) that can cause a camera (can be a point and shoot camera or a DSLR Lens) Lens to lose its image stabilization ability?

5

If you're talking about lenses permanently losing their stabilisation ability this could be due to any of the following factors

  • failure of the switch which activates IS
  • faults of the motion detection sensors
  • failure of the control system
  • failure of the IS motors
  • jamming of the IS lens elements

which in turn may be the results of

  • manufacturing defects
  • physical shocks to the lens
  • moisture or water damage
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3

I'm no lens doctor, but a good ol' drop on the floor might do it.

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3

I assume the optical IS function that is built into lenses is micro-gyro based, not image movement based, and so may be affected by a strong magnetic field.

Also, dirty contacts can cause all sorts of errors.

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