Possible Workaround fix
(How to fix below first paragraph)
So I was having this issue and worst of all I didn't want to reset because I didn't want to lose some of the data from unrecoverable apps that I was testing. My phone is a 64GB iphone 4S and I had around 3 gbs of space, I thought I had carelessly downloaded to many videos or something so i erased like 4 gigs of music and then the following hour, "No storage available" thats when i knew it was weird. I tried Holding power and lock buttons to maybe fix it through a reboot but that made it worse because every reboot would tell me "Slide to Upgrade" which would update my iPhone over and over again until it was back to normal but the storage was full. I had pretty much given up and hoped that an update would be released so I can clear out apps, music, etc. momentarily just to download the update. But out of nowhere I opened my settings when I was about to remove airplane mode, a weird glitch happened that fixed the issue slightly.
So basically I tried calling someone through my contacts and when it switched over to the phone app it said can't make call in airplane mode. I said to myself I'll just send them a iMessage so when using multi task I noticed a app open that had no icon but looked like the phone app. Its unclickable/irremovable and at first I was like great!!! Another problem cause of no storage.
Thus I went to settings and checked about to see if there was carrier issues or something and then saw 3.9 gbs available. I was in shock so then I rebooted to test it and it did the slide to upgrade and then the weird app closed in multitask and i had 3.9 gbs, I waited patiently for 30 mins between checking my about settings and waiting and noticed the space started being consumed again. So I put my phone in airplane mode and tried making a call through the most recent friends thing on the multitask mode and the error and weird app came up again.
I then went to settings and about and the storage went back up but only to 3.0 gbs. I am not going to mess with it until the final release to ensure that it gets patched but this is how i kinda fixed it on iOS 8 Beta 2 for iPhone 4S.
I don't really use this but I made an account just to try to help plus after what I went through I don't think anyone else should suffer through possibly losing their stuff. Anywho, hope this works/helps at least!