Well I got the update done last week. Must have tried 100 times, give or take. Reinstalled Windows 7 32bit on one of the old PCs with RS232. Didn't bother to update win7, but used latest version of flashmagic. Then everything ran according to instructions. No idea why. Happy it's done though.
During all the attempts I spoke to JVC UK tech support, they told me to always use latest version of flashmagic, not the old version in the file with the firmware. They said there where many bugs on older versions. I did ask them why they included the old version, but JVC Japan was orchestrating that site and JVC UK had no control of that!?
Anyway, not sure it makes any difference what version you use.