Hi, I know this is an old post, but as I just went through a day of experimenting, I thought I share my findings - someone might have the same issue in the future.
The crucial bit in Tom's post/scenario is: All is blurry with Barlow lens in the distance, but actually near objects can be focused.
Same was true for me. I have a 70mm Celestron Travel Scope and it came with a 3x Barlow lens (testing it with a 20mm eyepiece and prism - but also tried without prism). All blurry in distance and sharp with very near objects. Looking into the manual, it talks about a barlow lens - but only for the 50mm version of the telescope. That should have been a hint to me :). I seem to remember that when I bought the telescope, it advertised to give a Barlow lens for free :).
Peter's response up there talks about increasing the focus length. That prompted me to look into the Barlow lens. The actual lens is in the plastic part, not the tube - and can be moved around with a chop stick. The closer I moved it to the tube end, the further away near objects could be. So I took the lens holder out of top part and of course it does not fit into the tube. I put it into the prism part and then inserted the tube of the Barlow lens as far as possible to keep it tight and voilà, I can sharpen distant objects. I have not tried it with the moon as yet, or even planets - appears too much of a shaky construction to me - but at least I know I did not do something wrong. I got the wrong Barlow for my type of telescope.
Hope it helps someone. Uwe