I've been having the same problems.
I've got the tools just like ZYMEJ and I'm getting the same error message. I don't quite understand what to do with mkcf.exe. I thought that was used to create the .cf image from the raw binary information written from the Audrey. Once you've got a .cf image (I downloaded one or two from the audreyhacking.com files area) why do you need mkcf.exe? So what's the real process here?
I too, have not been able to do an automatic update. I've got the original 1.00.17.01 RC8 9/26/2000 image.