Okay, here's the deal: Mess this up and there's a very good chance you will have a brick on your hands. There are no safety nets here and no clean or easy way to recover a from a NAND screw up if you issue a bad command - such as targeting the wrong device or volume.

Please, only start this process AFTER you have tried to rebuild the rootfs on the NAND using the wiki instructions here:http://www.tonidouser.com/doku.php?id=advanceduses:resetrootfsplug2 - AND failed during either the remove step (read only error) or the wget step (write error)

That being said, the process of formatting and rebuilding a moderately corrupt NAND rootfs device is fairly simple.

1. Boot from a USB or SATA drive and SSH in.

2. apt-get update && apt-get upgrade.

3. Get some info about the NAND. Note if these info commands do not work or do not produce the outputs shown below, STOP - you have other NAND issues that cannot be addressed here.

# mtdinfo

Should give you:
Count of MTD devices: 4
Present MTD devices: mtd0, mtd1, mtd2, mtd3
Sysfs interface supported: yes

# cat /proc/mtd

Should give you:
dev: size erasesize name
mtd0: 00180000 00020000 "u-boot"
mtd1: 00020000 00020000 "u-boot-env"
mtd2: 00600000 00020000 "uImage"
mtd3: 1f800000 00020000 "rootfs"

You should see four NAND mtd devices and
We will ONLY work on mtd3 - the rootfs device.


4. Make sure mtd3 is detached:
# ubidetach /dev/ubi_ctrl -m 3

Be careful here. Make sure you only target mtd3.

5. Format device mtd3 and rebuild the volume on it.
# ubiformat /dev/mtd3 -s 512
# ubiattach /dev/ubi_ctrl -m 3
# ubimkvol /dev/ubi0 -N rootfs -m

6. Mount the newly formatted NAND volume.
# mount -t ubifs ubi0:rootfs /mnt
# cd /mnt

7. Proceed to step 7 on the wiki. http://www.tonidouser.com/doku.php?id=advanceduses:resetrootfsplug2

References
http://www.linux-mtd.infradead.org/faq/ubi.html
http://www.linux-mtd.infradead.org/faq/ubifs.html
http://www.plugcomputer.org/plugwiki/in ... n_To_Flash

Fantastic That all worked and the plug is now formating the USB drive ready to set up.

The only extra line I added in was to "# cd mnt" before proceeding to part 7 of the Wiki.

Many Thanks for all your help, I have enjoyed this little problem, and finally coming to a solution.

Glad to help. Added your edit. I'll add the whole procedure to the wiki later.