I've done a lot of firmware updates on E444X PSA analyzers, which I believe run the same HP UNIX os. I also remember that when I first started, I had a hell of a time getting a LAN boot path to show up.
This is all due to firewalls and blocked ports. You will have to experiment with adding exceptions to ports and disabling TCP/UDP blocking in windows firewall until you can get the instrument to boot from LAN.
First, I would try using a crossover cable between the PC running the update and the instrument. Some switches can block layers of the traffic needed to allow the instrument to boot from LAN.
The next thing to do is to make sure your host PC is disconnected from the internet. Then go ahead and disable windows firewall on all networks (private, public, etc).
In windows firewall exceptions, add the IP address of your instrument to the exceptions.
Also, in the Agilent update program install folder (in your "Program Files") folder, there is an application called "bootpdnt". Add exceptions to this application in windows firewall as well. The run the update program again, restart the instrument and see if it recognizes your PC as a boot device while the update program is running and at the appropriate step.