Anyone know what would cause the notification bar/drag to stop working? And how to fix it?
First try a reboot.
Make sure you aren't running any task killers.
If it continues to lock up, you could try a factory reset (Settings>Privacy) and see if that clears things up - that will remove all data from the phone (does not touch SD card) like call logs, sms/mms messages, email accounts and associated data, and any SW you have installed from the market. All of the SW will be re-installed automatically when you reboot, but you'll have to re-setup your email and other accounts.
If that doesn't help, likely time to talk to VZW...
Before you wipe, download a drawing app like DrawPad from the market and check to see if your screen is tracking your finger properly.
I took my D2 into Verizon and complained about the opposite behavior (notification bar pulling down when swiping between screens) and had trouble reproducing it.
I installed DrawPad on my phone and mimicked the same motion and found that my phone was randomly misplacing my finger when drawing straight across the screen. Basically it showed me drawing straight across and the line would instantly shoot up to the top or bottom of the screen.
I installed the same app and repeated the test on the demo phone and it worked perfectly so I have a new phone on the way to my house.
Verizon Galaxy Nexus running AOKP