This is the order of things I would try:
- Reset defaults on the DRAC and then try to update
- Try stepping the update to an earlier version rather than straight to 1.65 if you haven't already http://www.dell.com/support/drivers/us/en/04/DriverDetails/Product/poweredge-r900?driverId=8G1VY&fileId=3009896398
- Reseat cables on the DRAC daughtercard, and reseat the riser it is attached to
- Swap the daughtercard with a known good if you have one available
It is starting to look like a hardware failure, but I would try the above first. The command to reset to defaults via racadm is racadm racresetcfg.
Thanks