I'm getting the same error message. This is very frustrating. Not sure if it has anything thing with my service area. I'm at work right now, and I think my building walls must be super thick because my signal constantly goes from 3g to 1x all day.
I'm also in an Extended Network area, but trying to download via OTA right now. How long should this download take? I have been going for about 20 minutes so far and when I click on the System Status button, it lets me know that the download is happening right now and I will be notified after it is complete.