The popular version has Luther objecting to corruption. He did, but corruption was not the thing that made reconciliation impossible.
The indulgence controversy of 1517 was the occasion. An indulgence remitted temporal punishment for sin, and the campaign being preached in Germany was tied to a financial arrangement involving a bishopric bought on credit from a banking house. Luther's ninety-five theses attacked the practice as a theological error, not merely a racket: if God forgives freely, a payment cannot be part of the transaction.
Pulling that thread produced the real dispute. Justification, how a person comes to stand right with God, became for Luther the article by which the church stands or falls, and his answer was that it happens by grace alone, received by faith alone, with no human contribution at any point. Trent replied that this cut the nerve of the moral life. The two positions were formally reconciled in a joint declaration signed by Lutheran and Catholic representatives in 1999, a document each side reads rather differently.
Behind justification sat authority. Asked at Leipzig in 1519 whether councils could err, Luther said they could, and that removed the ground on which any negotiated settlement could stand. Scripture alone was left as the norm, though Lutheran practice reads alone permissively, keeping vestments, images, crucifixes and a liturgical shape that the Reformed swept away.
The confession came in 1530 at Augsburg, and it is a strikingly conciliatory document: it presents Lutheran teaching as the catholic faith properly stated, and lists the abuses corrected almost as an afterthought. It did not persuade anyone, and the Book of Concord of 1580 gathered it with the rest of the Lutheran symbols.