Mac person here! Firstly, in Finder, Preferences, Advanced, checkmark "show all filename extensions" so that you can SEE the real file type. Your text for this option might be different, if your OS is not the version mine is, but it should be very similar to this.
Next, make your web browser stop opening zip files. We want the file to STAY zipped. If you are using Safari: Open Safari. Click Preferences. Under the General tab, UNcheck the option 'Open “safe” files after downloading'. If you use Firefox: when you download the file and get a dialog window, choose SAVE file instead of OPEN WITH. You don't want the zip file to be opened. Just save it as is, please. (Or, if you don't get this window, you'll have to first change your Firefox preferences for downloads, temporarily. Ask again, and I'll look up where.)
Once your ***.gz file STAYS a .gz file (i think that's what it is?) then the Kindle's "upgrade" function should be able to see it when you copy it over there, and it will allow you to "Update Your Kindle".
Holler again if I haven't hit the actual problem.
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