Create Recovery Disk for Intel-based Terastation

Get the necessary tools/resources

First, extract the boot files for your device from the firmware using this method:
Extract Boot Files from Stock Firmware

Create disk image

Grub-based image

Using a linux system with grub2 and xorriso installed.

Create a grub.cfg suitable for your device:

Terastation WVHL/QVHL/6VHL/8VHL/RVHL

set timeout=0
set default=0

set root='(hd0)'

menuentry "Terastation WVHL/QVHL/6VHL/8VHL/RVHL EM Mode" {
                linux /vmlinuz-atom_d510.buffalo root=sde1 rw usbboot=yes mode=initilize ts4000=no acc=no
                initrd /initrd-atom_d510.buffalo
}

Terastation 4000 Series

set timeout=0
set default=0

set root='(hd0)'

menuentry "Terastation 4000 Series EM Mode" {
                linux /vmlinuz-atom_usi.buffalo root=sde1 rw usbboot=yes mode=initilize ts4000=yes acc=no
                initrd /initrd-atom_usi.buffalo
}

Terastation 5000 Series

set timeout=0
set default=0

set root='(hd0)'

menuentry "Terastation 5000 Series EM Mode" {
                linux /vmlinuz-atom_d510.buffalo root=sde1 rw usbboot=yes mode=initilize ts4000=no acc=no
                initrd /initrd-atom_d510.buffalo
}

Create a directory tree to create the disk image from:

mkdir -p disk/boot/grub/

Add the boot files and the grub config file:

disk/initrd-atom_d510.buffalo
disk/vmlinuz-atom_d510.buffalo
disk/boot/grub/grub.cfg

Generate the iso file

grub-mkrescue -o ts-recovery.iso disk/

isolinux-based image

Create isolinux.cfg

isolinux.cfg:

ui vesamenu.c32

TIMEOUT 50

label tsv
      menu label Terastation WVHL/QVHL/6VHL/8VHL/RVHL EM Mode
      menu default
      kernel /vmlinuz-atom_d510.buffalo
      initrd /initrd-atom_d510.buffalo
      append root=sde1 rw usbboot=yes mode=initilize ts4000=no acc=no

Create a directory tree to create the disk image from:

mkdir iso
cp isolinux.cfg iso/
cp initrd-atom_d510.buffalo iso/
cp vmlinuz-atom_d510.buffalo iso/
cp "/usr/lib/ISOLINUX/isolinux.bin" iso/
cp "/usr/lib/syslinux/modules/bios/vesamenu.c32" iso/
cp "/usr/lib/syslinux/modules/bios/libcom32.c32" iso/ 
cp "/usr/lib/syslinux/modules/bios/libutil.c32" iso/
cp "/usr/lib/syslinux/modules/bios/ldlinux.c32" iso/

=== Generate the iso file ===
mkisofs -o ts-recovery.iso \
   -b isolinux.bin -c boot.cat \
   -no-emul-boot -boot-load-size 4 -boot-info-table \
   iso

isohybrid ts-recovery.iso

Copy the image to a usb drive

dd if=ts-recovery.iso of=/dev/sdx bs=4k

The disk is now ready to use to boot the device into EM mode for firmware installation