Purchased the two lithium and charger combo about two years ago. I use my Ryobi drill and flashlight in the garage and around the house no where near commercial/professional levels. About three (3) weeks ago, tried to recharge both batteries and both of them showed defective on the charger. Is that common for both batteries to go bad at one time? Could the charger be at fault?

How long have these 2 batteries been standing idle without being charged? Lithium ion batteries can still discharge if left for too long. There is a voltage detector which detects whether the cells are too far discharged to be safely charged again and if that occurs the circuit is broken and the batteries will be deffective in the charger.
I have had the same problem with these and other LI batteries. Answer is replace the batteries and then make sure they are given a quick charge on a regular basis. However common advice seems to be that LI's should not be kept fully charged, but just partially charged until needed, then charge them for use, especially if usage is sporadic