The ballast resistor must drop the difference between the supply voltage and the LED forward voltage with the LED current through it so, consulting Ohm's law, we have:
$$ R = \frac{Vsupply-Vled}{Iled} = \frac{12V-2V}{0.03A} \approx 333\Omega $$
So your 390 ohms should be enough to get the LED to light.
Since the LED is a diode, once past the knee the voltage it drops will stay pretty constant over a fairly wide range of currents through it, so consulting Ohm's law once again and solving for the current 390 ohms will let through, we have:
$$ Iled = \frac{Vsupply-Vled}{R} = \frac{12V-2V}{390\Omega} \approx 26 mA $$
Which should be plenty to light up the LED.
The power the resistor will dissipate will be:
$$ P = ( Vsupply-Vled) \times Iled\ =\ 10V\times 0.026A = 260mW $$
So a 1/2 watt unit would be OK. Your 1 watt resistor will be fine, though, and it'll run cooler.
I would guess that you connected the LED backwards to start with and now it won't work in either direction because you let out the magic smoke. ;)