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Yeah mine froze and I had to take it to the store to be re-flashed. I found out when talking to the Kobo helpdesk that the desktop software was giving the wrong key combination for upgrade mode too! I think it says to press the menu button + power, but actually you also need to press the centre of the d-pad.
I've found the stores to be quite helpful (if a little dopey) with doing a reflash so you should go in and ask. You won't necessarily be able to get them to do a firmware update though - the helpdesk said that they don't send the stores the firmware image on cards unless a lot of people in the area are having problems with updating via the desktop app.
My upgrade ended up working though so don't give up!
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