hey everyone with the same problem, I was able to resolve mine with the help of the japanese 1.40 firmware version, it looks like this is the only one that can deal with this password problem.
The solution I followed is described in http://forum.discountnetz.com/buffalo-linkstation-pro-live/ls-ch1-0tl-startet-alle-15-sekunden-neu-flashen-war-fehlgeschlagen-t1179.html
As it is in german the steps are:
- get the 1.40 firmware including acp commander
- edit the acp commander.bat by adapting it to your NAS IP as seen in the NasNav
- disable firewall / windows firewall (for udp communication)
- execute the .bat, your NAS will now boot in EM
- edit LSUpdater.ini to NoFormatting=1 (safety first)
- run LSUpdater, switch to debug mode, select everything but repartition
- update
Afterwards I was able to see my shares again and to log in with admin - password. You can now also directly continue with a regular update.
Thanks to all the people out there helping in the forums for no money, you are saving years of my life :)