The TX-NR696 is still a fairly new model and I can't find the service manual online but there is one for the 686 which may follow very similar service mode procedures.
From that firmware update is carried out as follows:
Connect your USB storage with the firmware to the receiver USB port
Press [DIMMER] + [ON/STANDBY]x2
Press [TUNING UP] or [TUNING DOWN] to change source from NET to USB
Press [ENTER] to start updating firmware
This may be the same procedure you have already tried and if so then your only option may be to return the unit to Onkyo for a factory firmware reload. The only other way is to fix this as far as I'm aware is to remove the flash memory chips from the circuit board and copy firmware from a good working unit but you will have difficulty with this because it is such a new model and finding a donor or the firmware will not be easy.
Last Edit: Feb 26, 2021 11:26:15 GMT -5 by andyb1712
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