I had this same issue with 1st gen Ipad. Here is what I did.
Using two-step-verification
1. Reset device as new
2. Set up icloud by entering username and password.
3. When it attemps to log into icloud (it will generate a message to a *trusted device that you can allow or reject)
4. select allow on *trusted device
5. a pin will pop up (here is where the trick is) at the end of the password you typed to log into icloud: (type the pincode sent to the trusted device) without any space at all at the end of the icloud password. It will kinda look like below example
example@icloud.com
password/ busterfester890134 (the numbers would represent the code you received on a trusted device and true enough goes in the exact same field as the password without separation. Good luck