Have you tried running in SAFEMODE? Is DMA enabled/disabled?
I would definately boot into safe mode - hold down F8 after BIOS screen - and give it a whirl - you might have some process or app that is trying to query the device...
If safe mode does not work - get yourself a WIN98/ME bootdisk www.bootdisk.com (i think) and boot into DOS and do it all from floppy in DOS - as sometimes you have to be in DOS to FLASH drives.. and since Win98/ME there really hasn't been a genuine DOS - just Microsofts command line version... which wont cut it
Hope that helps