I'm having this exact same issue. In addition to it "timing out" while searching for updates, I cannot use certain features such as My Account app from my phone. When I log into the website for my account, it has a grayed out ghost phone instead of the thunderbolt. I think it has something to do with the phone not being attached to my account correctly. Is there any way to get VZW to fix this without doing a warranty swap out?
My wife's Bolt was having the same updating issue with the timing out. I tried everything possible including a factory reset. After reading your post I checked her online account to see if there was the "ghost phone" icon showing up instead of the ThunderBolt, and there it was. I called tech support and explained the issue once again, this time telling them I didn't think the phone was attached correctly as you stated. Long story short, the SIM card she had in the phone was not correctly attached. The phone was through Wirefly and it was not activated correctly. We went to the local store, got a new SIM and they activated it there with the help of tech support. The update just finished. No warranty swap needed.