So a pretty weird situation came up this evening. A Rebel MC80 at speed 1 got a head-on collision with an ISD at speed 2. According to the rulebook in the case of an overlapping the ship has to temporary reduce its speed by 1 and both ships suffers a facedown damage card. But in this case neither ship can make a maneuver that would bring them out of this deadlock. As there were no maneuver tokens or dials involved the ships only have their basic movement rules to work with.

First the MC80 reduces its speed temporarily to 0, both ships suffer one damage. Then the ISD comes at speed 2. It can not perform neither the 2 nor the 1 speed move because they would both overlap the MC80. So theoretically the ISD has to reduce its speed to 0. But then both ships suffer two(!) facedown damages? Would this continue until one ship is destroyed? Or is there a special rule for deadlocks like this I'm unaware of?

No.

Only 1 dmg card is dealt (face down) per collision.

In the case of deadlocked ships they continue to ram each other until one (or both) are destroyed (or the game ends).

What Green Knight said. but remember you still both get to fire on you'r turn before the ship tries to move and takes damage. In your example the ISD should be able to clear the road very quickly

Sometimes Iv'e had this work in my favor, as Iv'e had ships of mine start multiple enemy ships get in the traffic jam and hit each other or my ship. This isn't a tactic that I try to use, but it happens a lot when I'm trying to use MC30 torpedoes maneuvering close.