How I did it was using the pretty good Unified Android Toolkit. Sideloading a 39mb zip file (googled Nexus 7 GSM 2012 ota zip).
BUT prior to that every way I tried to do it using full 300 something mb factory image or the above 39mb ota file. Every time using my old fave clockwork mod recovery. Every time got the status 7 error.
Read a lot abt the status 7 error and seems to be abt mods to ur stock system causing issues. Don't know how doing it via the toolkit overid this but worked a treat after I'd been trying everything for months to update this baby!
I'm no newb, was modding android devices as soon as got my 1st milestone from Hong Kong, but this was a strange issue and looking at the forums I'm not alone.
Oh well... Finally got it. If ppl want more detail reply or PM me.
Sent from my Nexus 7 using XDA Premium 4 mobile app