AFAIK that firmware update automatically switches the firmware to boot from the network.
To fix it, you need to reset some of the variables in the firmware.
I just redid the steps found on p.18 of the Peg's manual.
"Step-6: Autobooting"
setenv boot-file boot.img ramdebug
setenv boot-device (harddrive's alias name here) *
setenv auto-boot-timeout 3000
setenv auto-boot? true
My Peg's busy installing gentoo so I can't check the firmware settings just yet.
*the boot-device might be the only thing you'll need to set really. ;)
Steph