I think you're making this overly complicated No other tools than the ones listed before in this topic are required as long as your version of MSCF.sfx is correct. You get the error message because the MSCF.sfx used is actually incorrect. In case of MSCF.sfx its version number is completely irrelevant. The only thing which is important is whether it works or not.
The whole process is very simple:
1. Patch the update.exe
2. Pack to CAB using cabarc.exe.
3. Copy/b mscf.sfx and the CAB you've just created to an .EXE archive.
4. Hex edit the line before update\update.exe.
How to get a working MSCF.sfx (from the other topic):