ReadyNAS NV (original) exhibits strange booting behavior

OK - here's an update: The system boots only after I do a factory reset. However, once I click on setup, volume creation fails and the status goes to corrupt root. The system cannot boot in the tech support mode or the factory boot mode, whatever you want to call it. Although, funnily enough, it shows disks as being present in the first and second bays before going corrupt root. In any case, I am unable to access the system using Firefox or Putty. However, Ping works.

Just for the heck of it, I did another factory reset and found something interesting - I clicked on locate after the system booted and all disk lights flashed. I clicked on the dialog box and the system vanished from Raidar only to reappear a bit later. Now, the light on top of the 4th disk bay is lit, activity light is flashing fast and power LED is flashing slow. Per the light pattern guide, this shows volume expansion, but I am doing no such thing.

The volume creation process started automatically after this with the same result :-(