I had this problem and tried multiple re-boots and system resets but had no success. This is a pain as I also could not downgrade the firmware because i was getting the “not enough space” error message. I finally solved the capacity issue in the dashboard by turning off the DNLA and itunes media servers and then rebuilding the content database. Two minutes and it was fixed!
See under: General - Cloud Access - Configure - Content Database - Rebuild
Once you have downgraded the firmware, I recommend you perform a full factory restore. This will wipe all your data, so you need to back it up onto another device. Also, it would be nice to keep the DNLA and iTunes media servers turned off.
Lastly, see this post:
http://community.wd.com/t5/WD-My-Cloud/Hidden-wdmc-directories-created-by-mcserver-and-photodbmerger/td-p/682091
