I've had exactly the same problems with this 'update' as many others seem to have had on these forums.
It would appear that there is a serious problem with this update and, consequently, I suggest that Iomega/Lenovo withdraw the update from their web site and advise customers NOT to install it.
I am utterly APPALLED to see that so many people have been having problems with this so called 'update' on this forum, yet they have left it available for others to download and install, KNOWING FULL WELL that it has destructive tendencies.
Contrary to their suggestions otherwise, I would say that they ARE liable for issuing alleged 'updates' which result in destroying a customers working device. Mr. Lenovo / Iomega please NOTE.
So I think the very least that they should do is offer the previous version of the firmware so that at least those of us that are able to coax the darn thing back to life can 'upgrade' ourselves back to the previous version!
My unit seemed to power up 'normally'; i.e. power LED goes solid white after about five minutes or so of flashing, and no error indications. But it doesn't talk to the network (and is much slower to 'start' than before!).
I eventually coaxed it back to life using the suggested direct network connection to PC, with a DIRECT cable connection (NOT a cross-over cable). It didn't seem to work at first, but after lots of unplugging and re-connecting of the network cable & re-trying the 'Arp -a' command .... I eventually did see a 169.xxx.xxx.xxx address, along with what I knew to be the correct 'MAC' address of the NAS. I then reconnected via my router, and all seemed OK.
The first time, this all took me the best part of 2 DAYS to get to this point!! (Thanks Mr. Lenovo)
So I was a little reluctant to switch the thing off again. But I don't like to leave it on all the time, so shut it down overnight. Optimistic that I had 'fixed it'.
The next day, I was back to square one again and have now just spent another 4 HOURS coaxing the thing back into life again.
SO ... as stated above, it would appear that this firmware 'update' has messed up something in the network set up process.
Although it is capable of operating 'normally' with a lot of manual intervention.
Lenovo people ... I don't care about being out of warranty. You OWE us all a solution.
Unless you're quite happy for the reputation of your company to go down the toilet. Coz it certainly will if this is how you behave with your customers.