A few hundred users have already installed OS 8.7.6 via USB memory stick successfully. And many had installed 8.7.4 before.
Make sure, there is just one file "kaos.bin" on your USB flash drive and not one in the root directory and another in folder "OS Update".
Before anything else I would take another USB flash drive, plug it into the PROFILER once, then download the OS once again (perhaps the file got corrupted during download), unzip once again and store in root directory of flash drive or OS Update folder.
At the risk of repeating myself, the instructions that are provided in the actual download with the bin file are incorrect.
If you put in a USB drive with the bin file on the root of the correctly formatted USB drive and power up the profiler, there is no message as clearly stated in the instructions. And no, the bin file is not corrupted because I used the procedure of holding down the two page buttons on power to successfully install 8.7.6 so the bin file is obviously good and was NOT the same as the previous installed version.
Fast foward. 8.7.6 install with a complete factory reset and everything is wonderful.
End of story.