App died installing. Now in limbo. How to fix?

I have and own the app Pic Grunger (paid version). There was an update today that I downloaded from the App Store on my iPhone. It downloaded, but then hung once the blue bar was complete. I left it for a while, but it was just stuck there. You couldn't launch it. So I restarted my iPhone (powered it down, turned it back on) and now the app is gone, but the App Store won't let me redownload and only shows me the grayed out 'downloaded' button.
So then I synced, then removed Pic Grunger from the sync list, then synced again. No app on the device, but the app store still won't let me redownload.
So then I re-check app in iTunes and sync once again.
Now the app icon appears with a blank 'waiting...' progress bar. And, as usual, the app store STILL won't let me redownload.
Anyone know how to force the app store to let me re-download?

It appears that the solution is to purchase the app from the desktop. I clicked BUY, was told I had already paid for it so get it for free, then downloaded it. It then synced and the broken icon is now gone and I can use the app!
It appears that there's a serious bug on the iPhone itself that prevents the App Store App from knowing when a download has failed to reset the 'buy' button.

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