Pete's tool will not work on Froyo 2.2, it is only for Gingerbread. Z4 should work, sometimes you just need to run it multiple times.
Try letting it run for 10 mins and then pull the battery on it. After booting back up run it again. This is what I used to do with Z4, sometimes it works in one cycle, sometimes it takes several. Also are you using the latest version of Z4?