Theme Stopped Working – Compatibility issues

Help! I installed WordPress and then purchased the Cartel theme and customised it. The theme was up and running the second I bought it without any issues. I go to login yesterday (about two weeks after purchasing and installing) and the theme is no longer working. After lots of reading through forums I tried to troubleshoot it and the only issue I found was that when I deactivated the theme via Control Panel, WordPress would then use the default theme and it would work fine. When I tried to reactive Cartel theme, WordPress wouldn’t let me login and my website was no longer there. When I called my web host they said it was ‘compatibility issues’.

My theme was working fine and it just stopped, how is that possible?