If it sticks at "DEBUG: setup connection" this usually means there is a driver confliction. The drivers for the Samsung Moment are very fickle, and sometimes tend to have a mind of their own. What seems to work is uninstalling ANY drivers from Sprint or Samsung that you may have on your machine, and then do a fresh install of the update utility. When you plug your phone into USB during 'download mode', check your device manager in Windows to make sure that the phone is listed as "Samsung Mobile Modem" under "modems" or else the flashing probably isn't going to work.
Good luck!