I found the problem is my Windows system is missing the Intel driver set, available at: https://communities.intel.com/docs/DOC-23242 , select Windows Driver setup 1.0. Just run it. Includes RNDIS (remote network driver), Composite Device Class, & DFU. Then unplug and replug the Edison once, to allow Windows to match and load the driver. I did unplug and replug a second time.
Now go back and reinvoke flashall.bat, and “Dfu device found” shows in the cmd window, and it proceeds to download stuff…as below.
I have not tried it myself. Request you to please try this and post your result for the benefit of community.
I got it working on windows 8.1
Get your dfu_util.exe from this post #4 https://communities.intel.com/thread/56012
Use a good, short cable.
Use the USB ports at the back of your PC, avoid the front panel ports. ( This is what made it work for me on Win8, my win7 machine flashed successfully after this as well)
If you are having problems with drivers try to disable driver signature then reinstall the Intel driver set like what Jayesh mentioned.
I double-checked and this is the version of dfu-util I was already using. I have been using 3ft Amazon Basics cable... been pleased with the quality and they have worked well with the various Edison units I have around.
I was finally able to resolve the issue once I installed the newer 1.2.1 version of the Intel Edison drivers. Flashed two Edison Arduino board without any problem from my Win 8.1 laptop.