I'm really puzzled about how your recording turned out like that, but I'm sure someone would have responded if that was the case. The H2 is great as a point and shoot recorder for making decent tapes of rehearsals, but that's about it. Even if it were possible, Zoom wouldn't have gone to a lot of trouble to fix the clipping issue.
Obviously I'm biased. I paid top dollar for an H4 when it first came out-the worst taping equipment purchase of my life. I hate Zoom.