Hello
I had many problem with the 2.3.32 version of my WDTV Live
by browsing the various forums I learned that it was possible to return to a later firmware
so I made the handling
usb fat32 with the firmware which was detected immediately
Happened to me too…
You have to delete everything on your usb key.
Put the latest firmware 2.02.32 on your usb key… (not the one you want to downgrade).
Boot the device, when you see the screen insert the usb key (wait 1 min) then reboot the device but keep the usb key in the device… It should reinstall the firmware.
Once it’s done, erase your files on the usb key and you can try again to downgrade the firmware.