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Don't worry about the cards, they won't be visible in firmware update mode. The single protected file is also normal in this case. Try updating the firmware again; reset the reader (don't forget to toggle the ON switch after pressing reset), connect it to the port which worked last time (since it looks like you were able to start the update after all) and restart the updater.
Another issue might be is that the battery is flat; is the red light on when Reader is connected? The best would be to get a PSP charger and charge the Reader with it completely.
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