Think of how B perceives it:
B: ... think think think think think think think—Sorry, what did you say?
A: [blah blah]
B looks back and thinks of A's utterance as an event which is completely done, finished. Linguists call this view of an event the perfective aspect. Perfective aspect in the past is expressed using the past form of a verb, You said or You did say.
That event, A’s utterance, occurred at a time when B was in a state of thought which started before A's utterance and ended sometime after it. Linguists call this view of a state imperfective aspect. Imperfective aspect is expressed using a progressive construction; in this case, since the state lies in the past, B uses the past progressive construction I was thinking.
Perfect constructions like I have thought and I have been thinking express a state which arises from a previous event and is current at the point in time which you are talking about. Linguists call that time you are talking about reference time (RT). A present perfect construction has the present as its RT: it expresses a state which is current now, at the time of speaking. Since B is talking about a past event, his† RT is the past; in that context a present perfect cannot be used.
A past perfect construction expresses a state with a past RT, a state which was current in the past, so you might think that I had thought or I had been thinking would be appropriate here. But the perfect construction does not express a state denoted by the lexical verb (think) in the construction, it expresses a state which arises from the state or event denoted by the lexical verb. B is not talking about the result of his thinking, he is talking about the thinking itself—so a past perfect construction doesn’t work either.
There is more about aspect here, and entirely too much about perfect constructions here. Be careful not to confuse perfective aspect with perfect constructions—they are entirely different things.
† I make the appallingly sexist assumption that A is B’s wife, only because that’s how this conversation always plays out in my own household.
I think the primary source of your confusion is conflating three very similar uses of these words. “Break” and “down” can be combined in different ways in different grammatical functions to say different things.
“Breakdown” as one word is always a noun, specifically a catastrophic event that a car can have.
breakdown noun
a failure of a machine to function : an occurrence in which a machine (such as a car) stops working
Source: Merriam-Webster definition of “breakdown”
“Break down” as two words is a phrasal verb, the first word of which can be conjugated to indicate the timeframe of when a breakdown occurred, e.g.:
- My car broke down near the circle around eight o’clock this morning.
- My car has broken down.
“Broken down” can also be an adjectival phrase that describes a car that has broken down, e.g.:
- My car was broken down until ten o’clock this morning.
- My car is broken down.
Best Answer
Two things before I get to your question: First, your friend didn't pick up his phone, not yours. Second, if you're talking about calling him again, you should say "call him again immediately".
Both of your scenarios can use the same words. Neither "would be" nor "would have been" is correct. If you're only guessing that your friend might have been driving, you should say "I thought he might have been driving" or "I thought he could have been driving". The first one is more common.
Also, you don't need to say what he's driving unless there's something special about it.
Here are some improved versions of your sentences:
And here are some other variants: