Thank you for the additional information.
I performed these additional actions:
Formatted a new 4GB Micro SD card and copied the original ISY Micro SD card content to the new Micro SD card.
Powered up the ISY .... blinking Error led.
Downloaded insteon_4.6.2.zip and extracted to the new Micro SD card after I reformatted it once more.
Powered up the ISY .... blinking Error led.
Through an exchange with Michel from UDI, he confirmed that the ISY994i is defective. I will be asking for a replacement from where I bought it (Smarthome).
Gaetan.