Having issues updating Nexus 7 tablet

I have a Nexus 7 tablet running Android 4.1.1 and I am trying to update it to 4.2. The over the air update fails all the time (probably because it's rooted and unlocked) so I am trying to do it manually. I have the SDK tools and the Nexus 7 tool kit installed. I downloaded the .zip file and tried to install it using the adb sideload command from the platform tools directory. I get an cannot read sideload error. The tablet is connected and shows up when I run an adb devices command and is in fast boot recovery mode.

Any ideas what I might be doing wrong???