I had this same issue, Ford wanted $400 to replace the unit, said nothing could be done about it. Blaupunkt said it was a lost cause--get it replaced. The Ford owners manual mentions this, but it fails to mention step 2 below--without step 2, it wont work! :)
1. insert a cd into the stereo
2. disconnect power (pull the fuse)
3. connect power
--the stereo will begin to read the cd and will stop it from cycling off and on
4. use the menu buttons to select default reset.
That's it... Hope this gets to you in time!
iambarefooted
November 2006