Check the BIOS jumper location. If it is set incorrectly, the BIOS update will not work. (but i would not expect that error message.) Page 51 http://download.intel.com/support/motherboards/server/s5000pal/sb/s5000pal_s5000xal_tps_r2_0.pdf
The BIOS ID string string in the photos looks correct and unaltered so i am supprized the update failed.
Making a new dos bootable fob is likly the best option, or you can down load and try the One Flash Update tool to load from windows or linux and see if it works for you.