i dont know if this helps... but still...
With a 8700g i tried to upgrade the OS and landed up the with the similar problem of "Unable to connect to the device during a Multistage Load operation". To cut the long story short, What i observed was that
- When i disconnect it from the DM, pull out the battery and put it back, my device shows a symbol with a code 507 (error code probably)
- during the step: reconnecting to the JVM, the Apploader retries for a n number of times, before it gives the above error message.
out of curiosity i pulled the USB cable out of the device (during the reconnection to the JVM step and still when the retries are going on) and plugged the USB cable back to the device as my device was showing the 507 error symbol.
And thatz it, the rest of the steps went thro' like a whistle and my blackberry came to life.