There is an alternate method that sometimes works better...
Download
http://www.neptunesys.com/tftpd32.exe and follow these steps to update:
Put the tftpd32.exe executable, and the aqua.bin file from the firmware update package into the same directory.
Run the tftpd.exe application.
Make sure that the current directory field points to the directory where you extract the zip file.
On the DHCP server tab:
Make the IP pool starting address an unused IP address on your local
network (usually something like 192.168.1.50).
Set the netmask (usually 255.255.255.0)
Make the size of pool equal to 1 or more.
Set the boot file to aqua.bin
Click the save button.
Make sure that no other DHCP server is running on your local network.
Using the update command
1. download and unzip the firmware archive
2. run ACLOADER.EXE
3. Open a command prompt and telnet into the AC3
4. type 'v' then hit ENTER; note the firmware version
5. type 'update' then ENTERr
6. press 'y' when prompted
7. watch the ACLOADER window... in the white area, you should something see this:
.....................
Client 192.168.xxx.xxx:xxxx .\aqua.bin, 211 Blocks Served
8. wait 10 seconds, then hit ENTER a couple of times until you see "Connection to host lost".
9. telnet into the AC3 again
10. type 'v' then ENTER; note the new firmware version
11. type 'exit' then ENTER