I'm having the exact same problem. I have an older Timefactor that the Update Utility will see if the pedal is booted up normally, however if I put it in update mode the tool will not detect the pedal.
I've tried USB from the pedal, I've tried using MIDI through multiple interfaces (Profire2626 and 002), multiple Win7 machines, a WinXP machine.
By the looks of what cattaneo is saying, the older update utility will allow me to update my pedal however I cannot find a download source for the older version. I can only find v1.6.1.
Can Eventide suggest a solution here or provide a download link to an older version of the update utility? This is killing me trying to get this thing updated.