I know this is a super old thread, but I fell here after getting a used HD500X I was having problems updating, and I wanted to make sure I posted my solution.
I have linux, so I was running my POD into a VirtualBox with Win7. I kept getting the timeout error, and knew I had a problem because it couldn't detect the version of Firmware I was running. Disabling the USB 2.0 option in the Virtual Machine settings allowed the device to update properly.
FYI.