An account will be marked inactive if you do not sign in for 270 days or within the first 10 days after registration. The account will then be removed if it has been inactive for 365 days. When the account is deleted, the user name is immediately available for registration.
Try this status checker -
When you went through the Account Recovery process link I listed earlier, did you give an alternate email address and were you informed that you would be contacted?
Try recreating the account as a new account if it is still available.
MS has recently changed their inactivity. after no log on for 365 days the data is gone, after another 365 days the eamil address is returned to the available pool of addresses.