Does anyone know how to prove that the following special value of the Modular Lambda Function is correct?
$$\lambda(\sqrt{2}i)=(\sqrt{2}-1)^2$$
I have a somewhat promising observation that might help us derive this special value, but it hasn't panned out for me so far. If we consider the elliptic function $\wp$ with $\tau=\sqrt{2}i$, the fundamental domains look like rectangles with side lengths of $1$ and $\sqrt{2}$, which exhibit a certain self-similarity: one of these rectangles can be dissected into two similar copies of the same rectangle, scaled down by a factor of $\sqrt{2}$. However, I haven't figured out how to use this fact to my advantage.
Another note: I did figure out how to prove the special value $\lambda(i)=1/2$: it follows trivially from the functional equation $\lambda(-1/\tau) =1-\lambda(\tau)$.
Any help is appreciated!
As OP requested, here is a solution based on Weierstrass elliptic function, with $$\lambda = \frac{e_1 - e_2}{e_1-e_3}$$
Though I think such an approach is almost the worst one, among the multitude of other approaches I mentioned in comment.
Let $\wp(z)$ has period $\{1,\sqrt{-2}\}$. Then $\wp(\sqrt{-2}z)$ is also periodic under this lattice, and this is even function, so we have coprime polynomials $f,g$ such that $$\wp(\sqrt{-2}z) = \frac{f(\wp(z))}{g(\wp(z))}$$ by looking at order of poles at $z=0$, we see $\deg f = \deg g + 1$. Note that $\deg f \geq 2$. I claim the $\deg f$ is exactly $2$.
Note that $f(x)$ has distinct roots (because $\wp$ is surjective on $\mathbb{C}$ and every zero is simple). If $f(x)$ has more than 2 roots, then $\wp(\sqrt{-2}z)$ has more than 4 zeroes (modulo $\mathbb{Z}+\mathbb{Z}\sqrt{-2}$), contradiction, as this number should be exactly $4$.
So let $$\wp(\sqrt{-2}z) = a\wp(z) + b + \frac{1}{c\wp(z)+d}$$ write $\wp(z) = \frac{1}{z^2} + \frac{g_2}{20}z^2 + \frac{g_3}{28}z^4 + \frac{g_2^2}{1200}z^6 + \cdots$ then one sees immediately $b=0, a=-1/2$. So $$c\wp(z)+d = - \frac{40}{3g_2 z^2} -\frac{200g_3}{7g_2^2}+ \left(\frac{10}{9}-\frac{3000g3^2}{49g_2^3}\right)z^2 + o(z^2)$$ giving $98g_2^3 = 3375g_3^2$, so we can normalize $g_2 = 30, g_3 = 28$.
Hence $e_i$ are roots of $4x^3-g_2 x -g_3 = 0$, i.e. $\{-2,\frac{1}{2} \left(2-3 \sqrt{2}\right),\frac{1}{2} \left(3 \sqrt{2}+2\right)\}$, there are six combination of $(e_1-e_2)/(e_1-e_3)$, one of them will be $3-2\sqrt{2}$, as desired.