Steve,
UMP25, Bob Jenkins, and Tim C. have this one right. (Though I might quibble with Tim on his distinction that the ball being thrown out of play was not part of an appeal. Whether or not it was part of an appeal is immaterial to the proper ruling as long as it was part of the "continuous action" of the play during which the baserunning infraction occurred.)
Namely, if the defense throws the ball out of play (i.e. "errs") while attempting a "continuous action" appeal, it does not negate the defense's opportunity to subsequently appeal after the ball is again made live (or while it is still dead under FED rules).
In addition to the J/R treatment referenced by UMP25, the following from the MLBUM discussion of appeals further supports this position (my emphasis).
Quote:
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(3) If the pitcher or any member of the defensive team throws the ball out of play when making an appeal, such act shall be considered an attempted play. No further appeal will be allowed on any runner at any base. (This refers to when an appeal is being made after a definite break in action.)
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JM