Mine wouldn't update at first, either. I had to do two things to get it to work.
1st: I deleted the previous update file in the main directory of the device.
2nd: I took the (2) out of the filename for the new update file.
If you look in your device (when it's loaded as a drive on your computer) and see either of those things, try fixing them. Eject the device and unplug it, wait about 30 seconds and it should start processing the update (there will be a box in the lower left corner).
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