Press 'Alt' on your keyboard and keep it held. In the Menubar, click the 'Go' tab and select 'Library' - release alt. (If you don't press Alt, 'Library' won't show).
Locate iTunes.
Open the folder called 'iPhone Software Updates' (or the iPad/iPod folder).
Copy the IPSW to your desktop.
In iTunes, you can now press 'Alt' and click on 'Check for update' and then select the IPSW file from your desktop.
Same thing was happening to mine for a while, just kicked in and restarting.
Give it time, it will kick in, must be the servers running hot on validating part of the install.