Homing not working on Ender 3 V3-SE

I have this printer for some time. Everything was working fine. Unfortunately, I wanted to upgrade the firmware. I flashed the official 1.0.6 firmware correctly. But after booting up it asked to do auto Z offset and bed levelling. It was going into loop for few minutes and gave QR code error message. This was happening for lot of time. Finally, it successfully finished the routine. But then I was that the z offset was set at 0.

I manually set the z-offset, but the auto bed levelling is now giving error.

The printer goes to center, tries to home, Drops CR Touch probe, lowers head till the light changes to blue. Rises, retracts the probe.

Then starts the bed levelling routine by going to bottom right. Drop the probe, tries to lower head, But stops before the probe touches the bed. Rises, and moves to bottom left and repeats.

When I try to do Auto Home, it goes to center, drops probe, lowers head till light turns blue and rises. When I go into Move menu and change Z to 0.0 (from 10.0) the nozzle does not touch the bed. If I try to go into setting z-offset, when the nizzle finally touches the plate, it reads close to -5. I know my original x- offset was -2.44

What can I do? It’s as if the printer is wrongly zeroing the Z axis. I.e. when the probe touches bed, it’s marking it as -2.44 instead of 0 (If that makes sense.) IF I try to manually do bed levelling, I get all points in -2.5 range.

Check your probe (being clean) and the nozzle.
I guess it has to do with the firmware update.

If your printer auto-levels correctly, it doesn’t matter what value is set at your Z axis offset (in the auto leveling mode). Run a manual Z axis offset afterwards. That’s what I usually do. I first run the auto level function (which gives me a Z Axis offset at -1.5. But at that value the nozzle prints in the air!!
I then do a manual Z axis offset, and it prints perfectly.

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MY problem is that the auto levelling does not finish. Either the head does not lower completely till the probe touches the plate on the first point (bottom right) OR the probe does not even retract & Lower before moving to second point.

After this happens, the printer goes in a loop of doing same thing 2 or 3 times and then givens error QR code. After power cycling, the z offset is set to 0.0. (But that’s not a big deal, I can change it manually)