Heh, feeling kind of stupid here. I checked the batteries first thing, of course. One was 85% and the other 75%. Figured that had to be good enough. After getting all the housing sections apart(really nice design on this by the way, each lens and the crystal are in their own threaded section, with no thread-set, so disassembly is very easy, and safe to do repeatedly) i found the crystal intact. So, after aligning the lens a bit better and reassembling, I changed the batteries. Seems fine, plus increased output from the lens alignment. I summed the voltages on the old batteries and found 2.4v, so the driver must not have any step up, and the diode must have a very hard 2.5v threshold, because it literally went from working fully to no output in 15 seconds. Thanks for the suggestions, I'm thinking about a new driver with some step up ability, but for $24, this pointer is still very sweet. I've seen a couple showing 75mW or more WITH IR filtering.
Aryntha, yes, I'm new to these miniature "dpss" pointers, but I've had HeNe's and IR DPSS Bricks(had a watercooled 60W until the power supply died. Who can afford to buy a 2.5v 90A transformer twice?) for a long time. Proper lab safety procedure is definitely in my repertoire. I used to use a web cam that i removed the IR filter from, but there's no driver support for it in Vista or 7 anymore, so thank god for inefficient IR filters in cheap digital cameras.
Update(If anybody cares): After the lens alignment, it's now punching holes in black tape at 2 feet in 3-5 seconds. It wouldn't burn at all before.
