Sounds to me like the .upgrade file association on your machine either doesn't exist, or is broken. You need to right-click on the file and "open with...". When the application list comes up, scan through to see if the empeg upgrader is installed. If yes, tick the "Always use..." box to re-associate it and start work. If no, then re-install emplode which will re-install the upgrader with it.
Before you try blowing this firmware, make sure you have got ONLY the new disk connected and that it is the Master. After the disk is formatted, re-install your original master and jumper the new one as Slave. Then finally re-blow the current version of the player firmware (also a .upgrade file).
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One of the few remaining Mk1 owners...
#00015