First of all, you need the following equipment ready:
1. A running a TFTP server connected to the router via the Ethernet interface
2. A copy of a working system image
3. A Cisco serial console cable
4. A computer with terminal software and at least one available serial port
Note that the disaster recovery can also be performed without using TFTP, but that's so primitive I won't even go into it. TFTP is the most primitive form of network based file transfer in existance, and it's available at no charge for most any operating system. If you want to experiment with X/Ymodem instead, be my guest.
To invoke the disaster recovery:
1. Within 60 seconds after powering up the router, press Ctrl+Break
2. Type "tftpdnld" for a help screen describing how to set up the mandatory environment variables:
IP_ADDRESS
IP_SUBNET_MASK
DEFAULT_GATEWAY
TFTP_SERVER
TFTP_FILE
3. Type "tftpdnld" again to perform the disaster recovery, you will be asked for several confirmations before download will start.