IMO, it is nothing to worry about, when you updated the firmware you ssh keys changed and since old ssh keys get stored on your host machine under ~/.ssh/known_hosts, it sees a conflict and gave this warning. You can rectify this by deleting old keys, open file ~/.ssh/known_hosts with a suitable editor like vim or nano and delete the line containing old keys and try ssh again.
I did a factory reset to the Omega.
I went back to the documentation and followed all the steps from the beginning.
I came to the blink program called 'STK01-blink'.
I saved 'STK01-blink' to my Omega. I went to the terminal ran the code and IT WORKS!!!!
[ 4.489247] usbcore: registered new interface driver usb-storage
[ 4.499070] kmodloader: done loading kernel modules from /etc/modules-boot.d/*
[ 4.516900] init: - preinit -
[ 5.069174] usb 2-1: new full-speed USB device number 2 using ohci-platform
[ 5.367204] rt3050-esw 10110000.esw: link changed 0x00
Press the [f] key and hit [enter] to enter failsafe mode
Press the , ,  or  key and hit [enter] to select the debug[ 5.569477] random: procd: uninitialized urandom read (4 bytes read, 10 bits of entropy available)
[ 7.998915] jffs2: notice: (401) jffs2_build_xattr_subsystem: complete building xattr subsystem, 0 of xdatum (0 unchecked, 0 orphan) and 0 of xref (0 dead, 0 orphan) found.
[ 8.023692] mount_root: switching to jffs2 overlay
[ 8.062463] urandom-seed: Seeding with /etc/urandom.seed
Error relocating /lib/libubus.so: uloop_cancelling: symbol not found
[ 8.202992] watchdog watchdog0: watchdog did not stop!
[ 8.208847] Kernel panic - not syncing: Attempted to kill init! exitcode=0x00007f00
[ 8.219687] Rebooting in 1 seconds..
@ice-master your command line is wrong, this,
mount /dev/<device name> /mnt/ ; tar -C /overlay -cvf - . | tar -C /mnt/ -xf - ; umount /mnt/
notice forward slash on each side of mnt.../mnt/ you missed it three times.