Incorrect Device Signature when attempting to Burn Bootloader

What am I doing?:
I am attempting to burn a bootloader onto an Arduino Ethernet using another Arduino as a software ISP (Arduino as ISP). So:
Board to be programmed: Arduino Ethernet
Board for Arduino as ISP: Arduino Duemilanove clone, Linksprite Diamondback

Why?:
I would like to remotely upload sketches via TFTP to the Arduino Ethernet. Ultimately would like to follow this process: Arduino Playground - TFTPBootloader1

What is wrong?:
As a preliminary test to make sure I can do this correctly, I am attempting to burn the bootloader through the Arduino IDE, using this walkthrough: https://www.arduino.cc/en/Tutorial/ArduinoISP
When attempting to finally program the Arduino Ethernet, I receive the following error:

avrdude: Version 6.3, compiled on Sep 12 2016 at 17:24:16
         Copyright (c) 2000-2005 Brian Dean, http://www.bdmicro.com/
         Copyright (c) 2007-2014 Joerg Wunsch

         System wide configuration file is "C:\Program Files (x86)\Arduino160\hardware\tools\avr/etc/avrdude.conf"

         Using Port                    : COM3
         Using Programmer              : stk500v1
         Overriding Baud Rate          : 19200
         AVR Part                      : ATmega328
         Chip Erase delay              : 9000 us
         PAGEL                         : PD7
         BS2                           : PC2
         RESET disposition             : dedicated
         RETRY pulse                   : SCK
         serial program mode           : yes
         parallel program mode         : yes
         Timeout                       : 200
         StabDelay                     : 100
         CmdexeDelay                   : 25
         SyncLoops                     : 32
         ByteDelay                     : 0
         PollIndex                     : 3
         PollValue                     : 0x53
         Memory Detail                 :

                                  Block Poll               Page                       Polled
           Memory Type Mode Delay Size  Indx Paged  Size   Size #Pages MinW  MaxW   ReadBack
           ----------- ---- ----- ----- ---- ------ ------ ---- ------ ----- ----- ---------
           eeprom        65    20     4    0 no       1024    4      0  3600  3600 0xff 0xff
           flash         65     6   128    0 yes     32768  128    256  4500  4500 0xff 0xff
           lfuse          0     0     0    0 no          1    0      0  4500  4500 0x00 0x00
           hfuse          0     0     0    0 no          1    0      0  4500  4500 0x00 0x00
           efuse          0     0     0    0 no          1    0      0  4500  4500 0x00 0x00
           lock           0     0     0    0 no          1    0      0  4500  4500 0x00 0x00
           calibration    0     0     0    0 no          1    0      0     0     0 0x00 0x00
           signature      0     0     0    0 no          3    0      0     0     0 0x00 0x00

         Programmer Type : STK500
         Description     : Atmel STK500 Version 1.x firmware
         Hardware Version: 2
         Firmware Version: 1.18
         Topcard         : Unknown
         Vtarget         : 0.0 V
         Varef           : 0.0 V
         Oscillator      : Off
         SCK period      : 0.1 us

avrdude: AVR device initialized and ready to accept instructions

Reading | ################################################## | 100% 0.05s

avrdude: Device signature = 0x040404
avrdude: Expected signature for ATmega328 is 1E 95 14
         Double check chip, or use -F to override this check.

avrdude done.  Thank you.

Error while burning bootloader.

Did you check wiring?:
At least 10 times. I assume if my board does not use the standard SPI pins on (MOSI) 11, (MISO) 12 , and (SCK) 13, the ifndef will use a bitbang approach to force this to work. It would seem I am not quite that far along in thie process based on the device signature checksum error.

Questions:

  1. Do I need a 10uF capacitor between reset and ground? Is that size fairly strict or is there an acceptable range?

  2. Please shed some light on what I am doing incorrectly?

  3. Do I need to just purchase an AVR ICP/ISP?

Notes:
I am using Arduino IDE 1.6.12.

(deleted)

  1. Yes, you need a cap between ground and reset on the programmer arduino if it has an autoreset mechanism - otherwise it will reset when avrdude opens the serial connection and you'll be talking to the bootloader on the programmer arduino rather than the arduino as isp sketch. The exact size is not critical. Anything larger than 1uF should be sufficient, but obviously you want some margin to account for tolerance in cap values (notice how coarse the specs on most caps are) and general bad voodoo.

  2. Not sure, but you definitely need the cap. I wouldn't expect it to get far enough to return that wrong data though...

  3. I recommend USBAsps - they're dirt cheap too.

airsoftsoldrecn9:

  1. Do I need a 10uF capacitor between reset and ground? Is that size fairly strict or is there an acceptable range?

Anything from 1uF to 10uF should work fine. Positive to Reset, negative to Ground.

airsoftsoldrecn9:
2. Please shed some light on what I am doing incorrectly?

Beats me. Typically if you get the wiring wrong (no clock) the signature comes out as 0x000000. I've never seen 0x040404.

airsoftsoldrecn9:
3. Do I need to just purchase an AVR ICP/ISP?

You can get the USBasp plus the required 10-pin to 6-pin adapter for under $5 on eBay. Unfortunately they come direct from China or Hong Kong so it may take a few weeks to arrive. You can get them faster by seeking out a local distributor but it will cost more.

Ethernet interfering with ISP? It is an spi thing...

westfw:
Ethernet interfering with ISP? It is an spi thing..

During serial programming the Reset line acts is held LOW which should hold the Arduino in Reset. I would hope that the Ethernet chip would also be held in reset and not active during programming.