Got it to Work
Can't really explain why but let me take you through it and tell you what I did, then maybe you can repeat the process with success.
First some theories: I believe there are some corrupted copies of the firmware on the Pandigital website. I had one checksum error, and another time it simply crashed while downloading.
There MIGHT be some corrupted storage sectors on your device that is causing the update process to fail.
My failure occurred when I was following the on-line process and trying to restore my backed-up files. This apparently corrupted the operating files that I had already installed but DID copy my books and music to the device.
Here is what I did that resolved my problem.
I went to the mirror site and manually downloaded the OLD firmware, hoping to start fresh. (http://mirror.support.pandigital.net:8080/Support/FW/Novel). (You CAN download the NEW firmware, copy it to your device, then do the off, on-+, thing and see if that works).
I then plugged in the USB cable from the Novel, opened a file manager, and copied the old firmware to the Novel. I then had second thoughts about my plan and deleted the file. (Thus changing file allocations) I decided to give the USB method one more shot.
I used the Pandigital update software (Pandigital Novel.Upgrader) to start the process and followed the instructions - it downloaded the update directly to the Novel, then told me to shut it down and restart.
I disconnected the USB, shut off the Novel (making sure I really shut it down and didn't just put it to sleep) then did the vol up (+) and on switch, holding them for 8-9 sec rather than just 5. This time the firmware updated just as it should and my Novel is back to being an ereader. I did lose all my backed up files, but that is a small price to pay for recovering the device. I will now work on getting all my ebooks back on and see if I can find the books checked out from the library (always a challenge).