A quick check would be to try and reflash it from another computer. Given that you are able to get into the self-test and view output, I would think the TX and RX lines would be okay. But another machine might be a worthy experiment.

Also, I would want to verify that you are using the original upgrader and upgrader developer image, that you have the empeg powered off and plug it in when asked. That can sometimes get you past any bad kernel that may have been there previously.