Two clarifications: The mis-connect was halfway weather related (thunderstorms for a while in FRA yesterday but prior to our flights) - I guess some would argue EU261 still applies but I am not inclined to take this to court. And LH ultimately rebooked us and paid for the FRA Sheraton overnight.
Oh man! Give me a break!
EC261/2004 downgrade refund and article 8 rebooking rights have to be granted by the operating carrier - regardless whether extraordinary circumstances are in play or not. Read EC261/2004.
We are not talking here about a EC261/2004 article 7 compensation.