Okay, I've compiled the busybox implementation of telnetd.
Works quite well with the preinit utility.

It is incredibly slow when the player is running though! Pause the player if you want to do anything. I'll see if I can get around this

To install:
Upload the attached file to the empeg
Untar it (tar zxvf emptelnetd.tar.gz)
Run the devs file
You can delete the devs file and the emptelnetd.tar.gz files from your empeg now.

And finally run telnetd

YMMV

- Trevor