I have the same problem with the upgrade. Here are the things I'm seeing wrong:
Using the D-Link Smart Console Utility:
1 - Using the file 1216TFWU.hex, I get the "Illegal firmware" message.
2 - Using the file 1216Tldr.hex, I get success
3 - Using the file DGS-1216T_D2_4.21.01.hex *crashes* the utility
Using the web interface:
1 - Using the file 1216TFWU.hex, I get a "firmware head illegal." message.
I'm not going to bother trying the other files with the web interface, I get the feeling I will brick the box, like the other customer did.