I have a CX700 unit running 3.5.6907.35 (2.1) and a Lync Server 2010.  CX600 units perform firmware updates normally. 

The CX700 (my only 700) seems to download the files but then objects when it validates them.   This has happened for both 4.0.7577.4100 and 4.0.7577.4387 versions.  The device log is pasted below.

0:02:37.667.326 : Raw data   83 (wchar),  06/26/2013|07:39:50 UPRO: preValidateCB() hContext = 42bc0, download time=127926

 0:02:37.667.566 : Raw data   52 (wchar),  06/26/2013|07:39:50 DownloadAuditThread() exiting

--:--:--.---.--- : ======================  Data loss counter:  0 bytes lost  ======================
--:--:--.---.--- : ======================  Data loss counter:  0 bytes lost  ======================
 . . .

--:--:--.---.--- : ======================  Data loss counter:  0 bytes lost  ======================
 0:02:42.654.981 : Raw data   85 (wchar),  06/26/2013|07:39:55 UPRO: notifyValidateCompleteCB() hContext = 42bc0, dwError = 2

 0:02:42.690.355 : Raw data  123 (wchar),  06/26/2013|07:39:55 UPRO: postImageUpdateCB() hContext = 42bc0, pInfo = 00185E20, pInfo->dwStatusCode = 200, dwError = 2

 0:02:42.690.457 : Raw data   74 (wchar),  06/26/2013|07:39:55 UPRO: postImageUpdateCB() error downloading index 1

 0:02:42.722.503 : Raw data   55 (wchar),  06/26/2013|07:39:55 UPRO: cleanup() hContext = 42bc0

 0:02:42.724.671 : Raw data   55 (wchar),  06/26/2013|07:39:55 UPRO: Deleting \DSK1\TEMP\CPE.nbt
--:--:--.---.--- : ======================  Data loss counter:  0 bytes lost  ======================
 . . .
 0:02:46.825.229 : Raw data   55 (wchar),  06/26/2013|07:39:59 UPRO: Deleting \DSK1\TEMP\CPE.cat
 0:02:46.841.927 : Raw data   86 (wchar),  06/26/2013|07:39:59 UPRO: scheduleNextUpdate() hContext = 42bc0 interval = 86400000

I also have a CX700, from what I reasearched online, in order to upgrade this phone you need to do it the old way using OCS 2007 R2.

Check out this link:

http://blog.schertz.name/2011/01/updating-lync-phone-edition-devices/

Refer to the part where he talks about the CX700 upgrade.

Good luck!

My phone is signing in to Lync and downloading the CAB files so I don't think this is an OCS vs. Lync issue.  As Jeff says in the article, "In most cases the latest OCS 2007 R2 software (3.5.6907) will be installed on a Tanjay and this version is capable of signing directly into Lync Server." 

I am running that version on my phone and I am signing into Lync.

You will not be able to go from 3.5.6907 to CU6 (4.0.7577.4100 ) or greater directly, you need to apply the Lync firmware CU5 or prior then can go to newer versions:  http://lyncinsider.com/lync-server-2010/upgrading-the-polycom-cx700-phone-to-lync-phone-edition-cu7/

Hi,

As Michael said, you need to CU5 first then update to CU7 as workaround for this issue. Microsoft does not have CU5 download on site anymore. The download file of CU5 has been provided in the above link Michael provided.

FYI I already covered this topic nearly 9 months before that article was posted.  The original article goes into detail about the problem and the resolution.  I also still have the older firmware package available for download.

http://blog.schertz.name/2012/08/lync-phone-edition-cu6-upgrade-issues/

Yes, I ultimately found my way to your post.   It hadn't come up for me originally because I was searching for the literal error from the log: 

 notifyValidateCompleteCB() hContext = 42bc0, dwError = 2