Don't commit to a new release date yet. At this point the project team still needs some wins before a reliable date can be set. Set a new release date when your team consistently hits its miniature milestones. As the project recovery progresses, make sure you stick to the plan. Don't relax just as things start to get better.
Most projects have enough credibility to attempt only one rescue.
If management sees failure again, they're likely to cancel or reassign it. Once the code is brought to a good state, your team will have restored confidence and better trust the project leaders. The project will also gain validity in the eyes of the rest of the organization. As strange as it sounds, you want to make sure everyone knows the exact status of the project. Your managers, staff, and customers need to know how the recovery is coming.