Sounds like the internal Smarthome PLM locked up for some reason during that process. I loaded 1.60 into an EZSrve and an EZBridge many times during Beta testing and never encountered that problem. Normally it takes simultaneous timer/macro execution for PLM lockup to occur. Unfortunately the image upload, Reset, XML file upload, none of these things can reset a PLM in that condition. Removing power has been the only way I found to resolve the situation. I understand why you want to stay where you are. For the benefit of others following this topic, there should not be any PLM issue associated with moving to 1.60 and it does appear to resolve some of the other PLM message issues.
Also 1.60 expands to 256 the total number of link records EZSrve supports per device as well as fixing a problem associated with assigning EZSERVE as the Controller of a Scene.
Glad you are up and running, on whatever image you chose.