Hose reels can and do go bad, though yours sounds somewhat atypical. Usually water sprays everywhere (except out the hose) as the rotating seals fail.
Diagnostic one - remove the 2 foot hose from the reel - does water
flow from the faucet to the end of the 2 foot hose? Mud wasps or
various other things can plug up even a very short hose.
Diagnostic two - with water out the short hose, remove the long hose
from the reel and see if water comes out the the connector on the
reel - same issues.
- Diagnostic three - check that water flows through the long hose when
connected directly to the faucet.
If you pass all those, then it should work with the hose on the reel. If you don't, you'll have a better idea where to look.