Hi everyone,
I had this problem and found a way around it. Other people may have already found this solution and posted it to this thread or elsewhere - I haven't checked.
Through following the steps for uploading a government ID I uploaded a scanned copy of my passport. I then got the text message: "Airbnb: We weren't able to confirm your profile. Please provide a new photo." There was also a notification under the Messages section on the Airbnb site that said something similar (I can't remember exactly and I can't see it anymore now that I'm successfully verified).
So, what to do? As Airbnb is comparing the photo on the government ID to my profile photo I thought "Why don't I just make them the same photo?" So I:
1. Copied the photo part of my scanned passport image to a new image.
2. Updated my profile photo with this new image.
3. Re-uploaded the scanned passport image as part of the verification process.
It worked. Once successfully verified I could then update my profile picture to something different.
I hope this helps.
Cheers,
Neil.