Spoke with LH First earlier today.
Options offered:
* Full refund
* First to Sao Paulo and then economy of local carrier to Rio
* First to Sao Paulo and terminating there
* Business to Rio on original flight and with some yet unspecified cash compensation
Due to the long advance notice they claim that it is not considered a downgrade eligible for EU261 compensation, i.e. 75% refund and travel in Business, which would clearly have been my preferred solution.