I know that all losses first have to be offset by any capital gains, and you can only take $3,000 loss deduction per year. My question is, do I only get to use the original amount that I invested as my loss? Or do I get to use what the investment was worth when it became "worthless", which would include accumulated interest plus my original investment? I didn't ever take any of the interest into my income for tax purposes, because I wasn't receiving any payments out of the investment.

Your loss is limited to your original investment amount. It does not matter that the investment may have reached a higher market value before it list value.