I ran into this issue and resolved it, just posting for the benefit of anyone else who makes the same mistake.

 

If you upgrade the firmware on your avic-Z# using the acronis disk image restore method and you have problems, make sure you have the 2010 version of acronis.

 

In my case, I happened to already have the 2012 version installed so I tried to use it instead. It wrote the disk image fine but the AVIC unit would go into a reboot loop trying and failing to apply the update. Once I downgraded acronis to 2010 and re-wrote the disk image, it worked fine.

 

Also be aware that there is a bootable CD version of the MHDD utility if you want to disable ATA security and do not have a floppy drive, as an alternative to the magic boot disk creator. See http://hddguru.com/software/2005.10.02-MHDD/. Worked fine for me.