Essentially follow steps as described in

Following is easy understandable procedure:

Create USB installed SheevaPlug

setenv bootargs console=ttyS0,115200n8 base-installer/initramfs-tools/driver-policy=most
bootm 0x00800000 0x01100000

Boot directory from USB, as following

usb start
ext2load usb 0:1 0x00800000 /uImage
ext2load usb 0:1 0x01100000 /uInitrd
bootm 0x00800000 0x01100000

Or set environment to:

setenv bootargs_console console=ttyS0,115200
setenv bootcmd_usb 'usb start; ext2load usb 0:1 0x00800000 /uImage; ext2load usb 0:1 0x01100000 /uInitrd'
setenv bootcmd 'setenv bootargs $(bootargs_console); run bootcmd_usb; bootm 0x00800000 0x01100000'

apt-get install mtd-tools
apt-get install mtd-utils
Reference: NAND Solid State Memory


Try SD Card reinstall

Installer load from FAT USB to load installer. 
reformat / (root) filesystem by ext3 journaling file system 
preserve data on /home

follow steps according to : 
debian installer for sheevaplug 

# apt-get install debootstrap qemu-user-static binfmt-support

root@sheevaplug:/home# mkdir work
root@sheevaplug:/home# cd work
root@sheevaplug:/home/work# mkdir rootfs
root@sheevaplug:/home/work# debootstrap --verbose --foreign --arch=armel --variant=minbase --include=module-init-tools,udev,aptitude,ifupdown,iproute,pump,nano,vim-tiny,\
  squeeze rootfs

root@sheevaplug:/home/work# cp /usr/bin/qemu-arm-static rootfs/usr/bin/
root@sheevaplug:/home/work# chroot rootfs
I have no name!@sheevaplug:/# ./debootstrap/debootstrap --second-stage


Edit /etc/inittab


# Example how to put a getty on a serial line (for a terminal)
T0:23:respawn:/sbin/getty -L ttyS0 115200 vt102
#T1:23:respawn:/sbin/getty -L ttyS1 9600 vt100