Looks like your usb stick that you try to update from does not have partition table, which seem to be the case with all newer usb sticks, and looks like startup script is looking for update.zip file only in first partition:
Code:
/etc/init.d/edge_user: searching for update.zip on /dev/sda1 : device not found
/etc/init.d/edge_user: searching for update.zip on /dev/mmcblk0p1 : device not found
/etc/init.d/edge_user: searching for update.zip on /dev/mmcblk0 : device not found
Since you mentioned you use linux, try creating partition table on usb stick using something like gparted, create vfat file system on first partition, place your golden update.zip there and try updating again. Seem like it should work