aha! maybe we are on to something here. the stock recovery is capable of wiping parts of the phone that amon is not,so maybe that had something to do with it.
also,you were defiantly trying to install stage2,correct? its easy to get them mixed up once theyre both named "update"
That is what I am thinking, especially since I don't think I wiped the cache between update1 and update2.
I definitely installed phase 1, deleted it from SDCard, then put phase 2 on sdcard and renamed it update.zip
However, darksideofjae never got phase1 to work. Hope he can follow our train of thought with these recent posts.
Basically, try 'fastboot flash [stock recovery]" per scotty's original post, launch stock recovery (adb reboot recovery) and use the wipe cache option in there before trying to reboot and install the update. See if that works!