K9N2 Diamond works with X2 3800+ but not Phenomii 940 with updated BIOS

Question

The system in question.
MSI K9N2 Diamond Current BIOS 7375v 2.6, have also tried 2.5, 2.4, 2.3, 2.2
AMD Phenom II 940
2X 2Gb Corsair CM2X2048-6400C5
Antec True Power 750 Watt P.S.
EVGA Nvidia GTX 260 GPU
W.D. 300Gb HDD
This system is about 6 months old. When I put this system together for my brother in law, he ordered the parts with the intention of using his old mobo but didn't realize it didnt support the phenom chip he ordered. SO rather than waiting for another ordered part we took a trip to our local Comp USA. K9N2 Diamond said it was phenom 2 ready, yeah ok. Anyway after a few hours of going crazy trying to figure this out for him I found out it wasn't phenom2 capable till you updated the BIOS with an older CPU. Lucky for us I use an X2 3800+ in my machine. So I popped my chip in and ipdated his BIOS with the USB drive tool. Everything seemed right with the world then.
 Now he brought the PC over for me to install Windows 7 64 bit for him. Did the install and was tracking down the few drivers Windows 7 missed and ran across Live update 4 for drivers and utilities. Should have known better but I went ahead and let it update the BIOS to 2.6. Sure enough, the CPU and GPU fans cycle on and off with no post. Check this post as his issues are identical to the ones I am experiencing. https://forum-en.msi.com/index.php?topic=133615.0 Now they never resolved this guys issue and it looks like he just RMA'd the board.
So I started narrowing down the possible issues. First thing I did was find the MSI USB Flash Tool again and put BIOS 2.2 back on with my 3800+ back in his machine. Machine worked with every BIOS version from 2.2 to 2.6 installed with USB tool with my 3800+ in his machine but would not post at all with all BIOS versions and his phenomII. Every time his CPU is in the machine, when the power is turned on the CPU and the GPU fans both go to max RPM then turn off over and over. Cleared CMOS multiple times. I know the clear was working when I put my 3800+ in it would state the time was reset in BIOS. Pulled everything out but one stick of RAM and same thing, posts with 3800+, nothing with phenomII. Tried the other stick of RAM although it passed both a memory test with USB tool and memtest with 3800+ installed. Same. Pulled CoolMax 750W PS from my machine and put it in his. Same issues. No post with PhenomII, posts with 3800+. Now this is with NOTHING but a stick of known good RAM, PS, Mobo, CPU and CPU fan. Using onboard video. All other drives, fans, pci devices, ect are disconnected.
So now I have 2 machines in my office all taken apart as I do not want to have to button my machine back up just to tear it back apart in case I have to do more to his Mobo with my CPU. I would rather not have to RMA the board if I do not have to like the guy in the link to the post I put up above.

Answer 1

I understand the need for future proofing mainboards as much as possible. What I am not ok with is the labeling on the box stating the board is PhenomII ready when in fact it isn't ready unless you have an older CPU that you can use to flash the BIOS to make it ready. Plus, if Live Update is the POS that everyone makes it out to be on the forums, why is it the first option on MSI's website for driver and BIOS downloads? MSI's USB Flash Tool is probably one of the easiest things I have ever used to update a BIOS, why not have that as the first option?
Anyway, I managed to talk a buddy into bringing his rig over to help me figure this out. Replaced his 965 with the 940 in question and it fired right up in an ASUS M4A785-M mobo. Tried the memory and PS in his rig as well just to triple check them and they were also good. Put his 965 in the K9N2 Diamond after making sure the BIOS was version 2.6 with the 3800+ and did not fire up with his 965 in the socket.
So a quick recap.
940 and 965 PhenomII will not post in the K9N2 Diamond but the 3800+ will.
All three post in the M4A785
tested memory by using only the slot closest to CPU in K9N2 on stick at a time. Both sticks work in the K9 with the 3800+ and both sticks work in the M4A785 with all three CPU's.
have tried every BIOS version from 2.2 to 2.6 using the MSI USB Flash Tool with the 3800+ in the K9N2.
Have cleared CMOS multiple times with the power cord out and holding down the On/Off switch for 20 seconds to discharge the caps before clearing. After every clear the next successful post says that the BIOS time needs to be updated.
P.S. works on three different rigs.
Any ideas or suggestions? If I must RMA than I must. But it works with the 3800+ so there has to be something firmware wise that is causing this.