Definitely try a different computer.
I had this exact problem on a POD HD Desktop and could not get the update to work, despite trying multiple USB cables and all the USB ports on a Windows 7 laptop. In desperation, I installed Monkey 1.68 on a Macintosh laptop and the flash update worked first time from that computer.
Incredibly frustrating when you have gigs to do and your gear is bricked. Obviously in my case the POD hardware was fine - this looks like a software issue to me and Line 6 need to put in some effort and solve it!
I won't be updating my firmware again in a hurry...