Everything looks ok, just apply the upgrade file again. Basicially it looks like it got interrupted when it was writing the new software to the disk, so it boots the kernel fine (thats in flash and was the first part of the upgrade), but then it can't find it's startup files on disk to start the player.

Keep in mind the upgrade won't be able to autorestart your empeg. Pull the plug and power it back up when the upgrade says "Apply power now".