Is taking the sheep of a friend who refused to return a borrowed item considered theft, and what are the implications of that?

His failure to answer your calls is not enough to conclude that he is denying the right (haqq). You must demand it from him, and if he does not respond, you should complain about him to the ruler. If your friend denies the device or refuses to return it, and you are almost certain he will not return it, and you are unable to retrieve it, then it is permissible for you to take what amounts to your right. This is not considered forbidden theft. However, if you are able to take it yourself, or if you are not almost certain that he will not return it, then it is not permissible for you to take what you took, and you must return it to him.

Ibn Qudamah clarified in Al-Mughni that if someone has a right (haqq) against another person who withholds it, and the claimant is able to access some of the debtor's property, they should not take from it the amount of their right, based on the Prophet, peace and blessings be upon him, who said: "Return the trust to the one who entrusted you, and do not betray the one who betrayed you." If the debtor acknowledges the right and is willing to pay it, then it is not permissible to take anything from his property without his permission. However, if the right is withheld for a permissible reason, such as deferment or insolvency, then it is permissible to take from his property without dispute.

If the loaned device is damaged, the preponderant opinion according to us is that it is guaranteed.