Factory reset disabled by server policy
If you cannot factory reset from  Android due to  a server policy, you can do a hard reboot via the recovery mode. From LG's website1:


  
  Using the hard reset
  
  If you cannot recall your unlock pattern, PIN, or password, you need to perform a hard reset to access your phone.
  
  When the phone is turned off, press and hold the Home Key  + Volume Down Key  +Power/Lock Key . When the screen shows the LG logo, release thePower/Lock Key .
  
  When the screen displays an Android robot animation, release the other keys.
  
  Leave your phone for at least a minute while it performs the hard reset, then your phone will reboot.
  


That should bypass any policy. Of course,  all the user data will be wiped.



1: The link is dead now. Gives error 404.