On plugin name changing, had an issue that got solved and I thought it would be helpful to let other WP fellows of the solution.
I was trying to change the name slightly but it was not getting updated. It was changed in both PHP and readme.txt files, but public plugin page still had the old name.
The issue was solved in the end, with the help of Samuel, aka Otto. It appears that if there are used non-ascii characters in readme.txt the system gets confused and rejects the update. Thanks Samuel.