That seems like a short life for a battery ... did the battery run down totally in the couple of months that you didn't use it? That can be hard on a battery, and is the only thing I can think of that might have damaged it. I've used my 505 daily for a year and nearly daily for another 3/4 of a year (total use: 21 or so months) and have not noticed much shortening of battery life. But mine is usually topped off just because I load books onto it so frequently.
You might go to a battery store and see what a custom battery build will cost you. I don't recall the exact amount, but replacing the 505 battery with an official Sony battery is outrageously priced.