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.gz is a compressed file. Flashing that put the COMPRESSED file on your mmc, so of course it would get stuck.
You need to decompress it with a tool like 7-zip (or anything else that can extract a .gz file). The uncompressed file should end with .img, which is the file you need to flash.
That is the diags partition. The boy under the tree is probably the main partition. You need to boot diags with MfgTool, or by setting bootmode to diags in fastboot.
From diags you need to flash main with dd.
All according to the instructions.
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