I am encountering a similar problem where I must re-image the system after losing the ability to synchronize with Sunrise Workbench (I get a time out error on the computer with Sunrise Workbench, which my controller says that I am not longer receiving safety packets).
As mentioned earlier, the KUKA Recovery Stick is the only way of re-imaging your system. I know that it doesn't come with the IIWA unless you get it quoted with your purchase, so you may not have one unless you bought it up front. If not, you'll need to get a quote from KUKA directly. Additionally, I do not believe that the stick comes with a recovery image on it, so you may have to also contact support and see if you can get one from them.
I will be re-imaging my own cabinet tomorrow, so if you get a hold of the stick and you can't figure out how to re-image the system from the documentation, just let me know and I can try to help you out. If you have the stick and just need the documentation, it's actually located on your Recovery Stick. If you for some reason don't have that as well, I can probably get that to you as well.