Hi Critix,
I am the guy who created the issue on Bitbucket. Thank you for your initiative - sorry I overlooked this post.
Unfortunately I have to report that this version has the same behaviour for me. When I try to "update" with the 500D running firmware 1.1.2, I get the message below. I did low-level format the card with the new Canon 1.1.2 firmware first, still the camera replies:
Firmware update program
Update file
cannot be found.
Please check the momory
card and reload the
battery and try again.
If I add the official 1.1.1 firmware file on the drive (as suggested in the troubleshooting guide) the update program does load, but only the official Canon update file is offered for update....
Sorry to be pain in the a*, but that's what I find

Best
Panca/Rainer
PS: I still observe that the ML-UPDATE.FIR file is pretty small (34kb) compared to the 1.1.1 version (66kb). Thanks for the consideration.