Noticed this thread and thought I would add my experience in the hope that it may help some one else one day. If you do the same - you do so at your own risk.
Have been running a LS-CHL 500 (fw 1.07) for ages and no significant problem. Yesterday power outage and when box rebooted itself continuous blue light flashing.
First observations were that the shares were visible and the SBS that I also run on it was working fine. Flicked the power button down to power down gracefully but after 10 mins box had not shut down.
Tried to admin login to the Web interface to do a reset from there but my admin user password was always rejected BUT I could logon as guest. I assume the problem was a firmware request and hence password reset but the default admin/password didnt work either.
Bit bullet and hard powered off box and restarted - same problem as above.
Saw this thread and did the Buffalo reset (holding button etc ) - no change.
Ran the LSRecovery.zip as per this thread - no change.
As I am a linux programmer I decided this wasnt going to beat me. Used acp_commander to get a telnet session on the box. I eventually tracked down the web management code and worked out that it used PAM 'login' service to perform the authorisation.
Checking the PAM login service config file /etc/pam.d/login I could see the following:
# Disallows other than root logins when /etc/nologin exists
# (Replaces the `NOLOGINS_FILE' option from login.defs)
auth requisite pam_nologin.so
I checked if the /etc/nologin file existed - it did so I renamed it.
Hey presto - my admin login now worked fine.
Now I dont know where the /etc/nologin file came from whether it was as a result of the power outage, the buffalo reset or the LSRecovery but if it happens again the presence of the /etc/nologin will be the first thing I check.
