Yes, you do need to go to H.08.98 first. (Even though it doesn't specify H.07.02 in the below warning I would do it just in case given the age of it).
http://www.hp.com/rnd/software/j49001038.htmCaution: Intermediate Software Update Required
(ProCurve Switches 2626/J4900A and 2650/J4899A) When updating from Software versions H.07.31, H.07.32 or H.07.40 to H.08.100 or later, you must first update and boot the switch using the version H.08.98. Otherwise, the update will fail.