to flash UPDATE.APP you must create a folder called 'dload' on the sdcard and put UPDATE.APP inside that folder. After that, power off the phone, remove the battery, wait for a few seconds, re-insert the battery and power on the phone WHILE pressing Vol+ and Vol- buttons.
Once you get to stock GB you can install twrp/cwm, then flash any custom rom (for GB baseband).
You don't need to install custom recovery or unlock bootloader in order to downgrade to stock GB.
All you have to do is force flash this patch (to allow downgrading), then force flash the Stock B895 ROM.
EDIT: after downgrading to Stock GB the bootloader will be unlocked and you'll be able to install any custom recovery (and rom).
Did you follow the exact steps described in my last post? That procedure worked flawless every time I tried id.
What exactly did you do? When does the phone shut down? It should restart after flashing the first file and you're supposed to remove the battery right after restarting. Then copy the second "dload" folder to sd-card and flash the GB Rom.
1. download this file and copy it to a folder named "dload" on the sd-card (if it doesn't exist, create it)
2. power off the phone, remove the battery, wait for 3 seconds, insert the battery
3. press Volume+, Volume- and Power buttons (a pink progress bar will appear. When it reaches 100%, the phone will restart.
4. download this archive and extract the folder named "dload" on the sd-card (overwrite the previous one)
5. power off the phone, remove the battery, wait for 3 seconds, insert the battery
6. press Volume+, Volume- and Power buttons (a pink progress bar will appear. When it finishes, the phone will restart several times, at the end having the latest official Gingerbread installed.
You can download the downgrade package directly from Huawei's website (http://consumer.huawei.com/en/support/downloads/detail/index.htm?id=13855).
Just follow the instructions provided in the readme file that's inside the archive.