Did you remove power / disconnect power / turn off the switch or breaker to the transponder, and then turn it back on?
If not, that's the problem as to complete the firmware update IN the transponder, requires that power to the transponder be turned off and turned back on again (at which point, the new firmware is now installed).
Do you have two displays? If so, turn off one display; is transponder status normal on that display?
Then turn off the one that's powered on, and power on the one that was off; is the transponder normal on that display?
(This diagnoses if the transponder is wired to both displays, as required.)
What serial port is the transponder connected to? Could you show us a screenshot of that serial port?
If none of those work, please contact Dynon Avionics Technical Support - 425-402-0433 or support AT dynonavionics DOT com to arrange to have the transponder sent back for evaluation.
ScreenShot of display after v14 update.