Start off with a perfect replica of a human mind. Eliminate absolutely all measures regarding selfishness, self-delusion, and rationalisation ... Eventually, use the most optimal mind coming out of this process and increase its intelligence until it becomes a 'Friendly' A.I.

The mind does not have modules for these things that can be removed; they are implicit in the mind's architecture. Nor does it use an intelligence-fluid which you can pour in to upgrade. Eliminating mental traits and increasing intelligence are both extraordinarily complicated procedures, and the possible side effects if they're done improperly include many sorts of insanity.

Human minds aren't designed to be changed, so if this was actually done you would likely just upgrade the first mind that was insane in a subtle enough way to get past the judges. It's conceivable that it could work if you had ridiculous levels of understanding, but this sort of thing would come many years after Friendly AI was actually needed.

check it fits standards using a review board consistent of people who are highly moral and rational by the standards of ordinary humans.

You mean real, meaty humans that whose volitions aren't even being extrapolated so they can use lots of computing power? What makes you think that they won't accidentally destroy the universe?

The AI fiegns sanity to preserve itself through the tests and proceeds to do whatever horrible things uFAIs typically do.