I suggest looking at
OpenInkpot 0.2 Installation Guide and
Restoring original firmware from OpenInkPot.
A 1 GB SD card is best, although others might work.
Your update procedure sounds right. The other thing is to make sure the battery is fully charged. You could also try attaching the USB charger for the update (although I have never tried this, it is recommended by Jinke). If this works, then most likely you have a sub-par battery. This is the most common problem with the Hanlin.
For a list, of firmware sites see
EZReader Firmware. I like the Feb 25 LBook firmware (or OpenInkPot).