Colleague blames me for not spotting typos when I only reviewed the structure and content

"The only real critique I had on my thesis was that the chapter I sent you had typos. I went through this chapter again and found quite a few. In the future when someone asks you to review a chapter you need to carefully check and find typos because it's embarrassing to send a final thesis with a chapter filled with typos. Its disappointing when you rely on someone and they screw you I hope in the future you do a better job."

This is unfair. What happened was, at best, a miscommunication on their part. They somehow thought you would check thoroughly for typos, which you did not have time to do. Unless you told them "this chapter is perfect and doesn't need more editing", I have trouble imagining why they would assume the chapter was camera-ready.

Let me start off by admitting that I am able to see my fault in this. I could've (should've) done a more thorough job in editing.

I don't see that as a flaw. If anything, perhaps you could have communicated more clearly about what you were able to do, as well as what you did not do (thoroughly check for typos).

I feel ultimately it is their graduate thesis and their responsibility for its contents.

Exactly right, and this is truly the "bottom line" here. No one else is responsible for the content of your thesis but yourself. Getting help does not absolve you of the responsibility to proofread your own document and when you defend, you are supposed take full ownership over what is written.

what I do care about are the things they are telling other people about me (ie I screwed them, I'm lazy, etc).

The word for this is "bullying". This behavior is not acceptable and should not be tolerated by you or anyone else.

You don't owe this person anything, were under no obligation to help them, and everything you do for them is done in a spirit of generosity and kindness. If they don't think you did a good enough job, that's their problem, not yours. If they don't want your help, they are under no obligation to ask for it.

It sounds to me that you did it exactly right, concentrated on the what the most important thing to improve was a the time - a poor structured and argued thesis might fail. One with typos is unlikely to.

Believe me, if this person is going round bad mouthing you to others, the only person it is going to reflect badly on is them.

That student's response is obviously unnaceptable and quite rude. You should gently remind the student that ultimately they are responsible for their own work when they submit a document and if editing was so important to him/her next time they should hire an editor.

That being said, in the future it's a nice gesture to let others know ahead of time if you only looked at grammar or logic so they know what still needs looking over.