Well, if there is noone else out there, I can continue in monolog mode, but I still hope some with experiences could provide some support.
I guess that these messages mean that some basic frimware part should have been transfered to Buffalo unit and unit should be in so called EM mode.
Should this basib part stay there also after reboot? Or do I may/need to reboot after that and before firmware upload?
accepting requests..
Client 192.168.11.151:1568 C:\..................................\uImage.buffalo, 25
09 Blocks Served
Client 192.168.11.151:2054 C:\..................................y\initrd.buffalo, 28
85 Blocks Served
Now NAS naviagtor should find the unit 192.168.11.151. But it doesn't find it normally. Few times Nas naviagtor has found 192.168.11.150 instead of 151. and once I succeeded to start FW upgrade with LS_LGL_FW2.01 which hanged but later LSupdater has failed to found any upgradable unit. While Nas naviagtor finds LS-LGL-EM21F 169.254.207.xxx, which means the unit is online and waiting.
It feels like might be a network or a DHCP issue and unit just looses it's IP after entering to EM state.
My network setup is direct connection between PC or using separate switch. PC has been set to 192.168.11.1 and gateway I have tried both 192.168.11.1 and 192.168.11.254 (last doesn't exist in this configuration).
Considering that one has spent to this task many hours, means that the manufactured product is of low quality and doesn't have a required support.
But as I feel that I'm already close to solution I shouldn't want to give up at this point.