Easy answer: Make sure you have enough disk space free before installing the update!
Long answer: So I immediately jumped at the Windows 8.1 Update MSDN download announced yesterday at Build. Everything went great until it rebooted during the install. It got to 77%, then hung for several minutes, then rebooted again. I was then told it was reverting to the previous version of windows. When I finally logged back into my machine, a nice app screen came up telling me that the update couldn’t be installed. At the bottom was the following error code. I tried this twice… same error at the same place both times.
Sorry the screenshot below is so bad – my screen capture tools weren’t loaded when it was displayed, so I had to take a pic from my Surface I had next to me.
Anyway, I did some googling and found that there are logs here… C:\$WINDOWS.~BT\Sources\Panther. I don’t remember now, but one of them had the activity log of the entire upgrade attempt. At the bottom was the answer. It referenced insufficient disk space! I had 17gb left on my drive, so it never even crossed my mind that that could be the problem. However, I cleaned up my HD and tried again with 47gb of space, and it worked perfectly!