I have a text string stored as a
Problem was apparently not the SQL server, but the NAV system that updates the field. There is a compression property that can be used on BLOB fields in NAV, that is not a part of SQL Server. So the custom compression made the data unreadable, though the conversion worked.
The solution was to turn off compression through the Object Designer, Table Designer, Properties for the field (Shift+F4 on the field row).
After that the extraction of data can be made with e.g.: select convert(varchar(max), cast(BLOBFIELD as binary)) from Table
Thanks for all answers that were correct in many ways!