Thanks for your replies,
The file is OSPACK (the only file on a 256MB FAT16 CF I used to flash succesfully before)
and it is 16.777.216 bytes (16.384 KB). File is in CF root, no other files/folders there.
The power cord is always plugged in while flashing - indicated by the orange battery icon.
While flashing both green and orange leds are lit for about one minute (used to be more than 1 minute before).
Once both leds go off, i reset the unit, put cover on battery and put unit in normal operation mode.
When turned on, battery led goes off and thats about it