A client brought this issue to my attention today as well. I have no idea how it occurred but I was able to restore their site.
1. FTP access worked fine. But permissions, deleting or renaming the file did not work. Viewing allowed me to see the site and the issues. A huge “new” file instead of what was supposed to be there.
2. Hopefully you have a copy of the install, which we had on our local machines. Open the file and copy the contents into your clipboard.
3. Using the simple web admin tool panel, we run Cpanel, I went into the File Manager on the server.
4. The File Manager has a text editor, open that, copy+all, and then paste overwriting the old text with the copy from your local version.
5. Save and test. Ours worked.
6. CHANGE YOUR PASSWORD FOR THE SERVER ACCESS. While this is not likely the cause, it can’t hurt at all to make a change.
For reference this client is running WP2.02.
Also for reference we have seen random files in many client installs have <br />
and “1” inserted into the code over the past 9 months.