Damn, haven't seen something like that for quite a while. I agree, that damaged NOLO should block flashing at all, and it seems awfully hardware'ish to me - except that, before flashing, Your device worked well.

I would try cold flashing anyway - remember, You got fraction of second to go things properly, so You may need 20-30 tries, until damn "can't find suitable device" gives room to a successful message.

Yet, I presume, that only effective thing You can do is trying rescue InitRD, suggested few posts ago. Without that, we're just guessing.

I'll try to interest some knowledgeable folks about this thread (although, not promising anything) - please, keep us updated, as I'm very interested about how it develops.

/Estel

/Edit

I know You've tried R&# mode with some watchdogs disabled, but could You try to disable all of them? I remember guy, that got some fault in battery recognition (probably minor hardware thing - raw BMI value was wrong, so getbootstate killed booting process), and in his case disabling every single watchdog resulted in bootable device.

Yet, I really thing only sane operation now is rescue Inird.