Would it be possible for them to both fry at the same time??
Absolutely yes. Have experienced such phenomenon myself just couple of weeks ago. To my greatest surprise I had them replaced in no time. It was a 2GB Corsair Dominator 1066MHz kit. One would think why would such a fancy kit die all of a sudden, but there you go.
Actually, now when I remember, I think it happened just like you described. I noticed strange windows behaviour, rebooted and got nothing but a frozen post screen. At first I thought it was the mobo. Luckily I had another 2GB kit at hand, I did some tests and discovered the actual source of the problem in no time. Later tested the kit on another DDR2 machine just to make sure, which I did.