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Can you try upgrading connectec to the LAN connection via ethernet if this is not what you are currently doing ?
Have you tried upgrading to 3.2.2 and then 4.0.5?
Okay - turns out that was part of the answer - use a cross-over cable and connect directly to the device. The web-page upload still timed out on this option but the flash exe restore tool was able to upgrade it successfully then.
Thanks for the pointer.