Stuck at "Installing update..." in recovery mode
I had suspected that formatting additional partitions like /firmware and /persist might be somehow related my boot loop - but I have no educated confirmation of this! Any CM aftermarket firmware that I tried would get stuck at the boot though.

The following solved my problem:


Install the (latest) Google Stock Android - this is just as easy as installing Cyanogenmod
Install ClockworkMod Recovery
Install Cyanogenmod Rom