I see a two, maybe three potential problems here:
1) Your past "misdeeds," which will be an additional hurdle you need to overcome. The problem with that is airline interviewing and hiring is flaky at best to downright insane. Whether or not your DWAI will be a factor is solely dependent upon what loon is running the hiring program at the time. The given that the washout is more recent, I think in most cases that's going to be the bigger issue. Probably the best you can do is own any part you had in it (and probably a few you didn't) and try and impress upon future interviewers that you recognize and have address the shortcomings which caused the problem (and that's hard to do, particularly when you feel you gave it your all - what more could you have done? You'll need to think on this one quite a bit I'm guessing). Find a way to package it into a what I've learned since then and how it makes me more of an asset to your operation.
Years ago I was involved in a flight training accident as a CFI, which could have been a career ender. I've definitely had my share of lucky breaks along the way, but I also spent several years on the sidelines, still flying, while I figured out how to package that not just to sell it to an employer, but so that I truly did gain something out of a bad experience. Since then I've been hired by a 135/corporate operator, two 121 carriers (one now out of business, the other on the way - so picking airlines obviously isn't my forte'), interview and received offers from a 121 regional and a major middle eastern carrier, so hurdles CAN be overcome. Cubdriver's delivery is a bit harsh, but it's not altogether inaccurate.
2)
I know I'm not broken. My past training record proves that. I know I would kick butt at any training course now, especially if it were on the same type.
I obviously don't know you or what issues you had with training, but be certain that you really understand what is expected. I've seen people new to the industry that don't quite understand what's expected in an airline training program. You are expected to show up for each session already knowing what you're going to do cold. Don't expect to be talked through maneuvers, procedures, ect. Have memory items down VERBATIM, so on and so forth. If you don't have those things covered, you will fall behind, and they won't bother catching you up. You may have this down - if so disregard, but I throw it out in case.
3) Probably the biggest one:
I'm not going to waste another year of my life flying some light charter op. as a display of punitive penance for my "training sin".
It appears to me you are suffering from the biggest problem most of us do - low SA (situational awareness), aka; having blinders on, not thinking out of the box and so on.
If the only goal acceptable to you is a 121 job, then you have tremendously limited your options. I get that flying a piston twin 135 isn't what you signed up for, but ask yourself where could it lead? Many 135 jobs now pay better than the regionals do, particularly the first few years. Can you parlay that into a turbine 135 position, and then make connections from there to go to a corporate operation (where your personality and ability to fit in to the culture is more important that "past sins')? I think you need to re-evaluate the options available to you and determine which ones offer the best long term potential.
There is no doubt that at 42 you are under a very real time pressure, as a 45 year old who was recently kicked to the curb, I get that. Unless I hit the Powerball, I'll most likely never see out of this career what I expected to when I started. That said, I've done exactly that, and have made a significant career course correction which I think (hope - call me in 20 years and I'll tell you if I was right) will provide more satisfaction than where I was headed before.
Best of luck to you moving forward.