Mohit,
Based on your extensive documentation of the problem I will make a wild-ass guess that you are not using a TFTP server for your file transfers.
PL
Gustavo,
I was able to skip step 4 (and 5) and upgrade directly from "sx300_fw_1.3.7.18.ros" to "sx300_fw-14502.ros".
Thank you for detailing these steps.
Paul Lemaire