I'm having the exact same problem... agh! I've got a LU66 too. I've installed the HBC/Back-up loader on older Wii's and had no problem.
I've got the HBC working great, but when I try to install the Back-up channel, I run into problems. I run the IOS35 downloader through HBC and it works fine, then I go into Wad Manager and it freezes when I push 'A' on IOS35 to install the other .wads. If I choose IOS36 it'll let me go further, but the other files need IOS35 to work.
Anyone know a fix to this, or another way to install Back-up launcher?