Nick,
I just had a similar experience...
I'd get all the way through each block of the sbf, and then it would try to put the phone into BP pass though mode, stall for a bit and Fail. When the phone switched to BP pass through notification popped up like windows recognized a new device, but it never asked for drivers, and acted like it was installed fine.
After failing twice, my battery died (and then you cant do anything till it gets charged). This all took place under windows 7 64.
Lucky for me, I know someone with a D1 and borrowed the battery and started over.
With a fresh battery I tried it all again on a winxp (not 64) pc. Installed the latest moto drivers from their site. Found Here:
Moto Drivers 4.8.0
Installed Rsd lite 4.9 and plugged in my phone (it was already in bootloader mode, since it had failed twice before.
This time, it went through the flash, switched to BP pass through mode and finished fine (I did have to boot into recovery and factory reset to get past bootloop).
When it got to BP Pass Through mode, windows recognized the phone as MDM6600 device and automatically installed the drivers.
This is where it hung on the windows 7 machine, and I'm pretty sure it's because it didn't automatically install the drivers. The full sbf RSD lite package includes those drivers (the tbf release package). If you cant try it on a windows xp machine, you'll have to act quick and be ready for the phone to switch to BP pass through mode.
If you cant try from an XP machine try this:
Get ahold of the MDM6600 64 bit drivers (either from tebower or elsewhere), unzip them to a location you can easily find, and open Device manager.
Start the sbf as normal. When it tries to switch your phone to BP pass through mode quickly go into device manager, find the motorola device, right click it and select update drivers.
Tell it not to search but that you have the files on the pc. Browse to wherever you stored the MDM6600 64 bit drivers and install those.
If it gets the drivers installed quick enough, rsd lite should successfully recognize the phone in BP pass through mode and continue onward.
Good luck.