Its very easy to downgrade the firmware and it has been mentioned on this forum.
You can get the firmware from here. You have to register and sign in but as it is another WDTV forum you may find this to your benefit.
http://wdtvhd.com/index.php?showforum=70
The technical bit is that you have to update one of the included files to fool the WDTV into believing that it is a newer firmware otherwise it will not receive the downgrade.
Google ‘WDTV Live downgrade firmware’ for more details.
