These are the steps I went through:
- Tried to upgrade my Nav and the screen went blank
- The power light was off as well
- Left it over night as I was waiting for a reply from the forum
- Burned the firmware on a different brand of CD
- Popped it in the Nav
- Then turned on the ignition

When I turned on the ignition, the Nav was already in the process of upgrading.

May be try that sequence. Let it sit for a while, then pop in the CD before you turn on the car. May be worth a shot.

I have an MK4 though and according to UCrewX5, MK4's recover from a bad OS upgrade much better than the MK3's. Hope you can get yours working.