Have you tried Cyanogen 4.2.3 yet? I wouldn't bother with the regular Donut when you can use his optimized version instead. Here is a link, do the same thing renaming it to update. If that doesn't work I know someone who understands all that hoopla you just pasted.
http://www.cyanogenmod.com/download/rom/update-cm-4.2.3-signed.zip