When I had this issue with the 2.0 update, Apple Support had me power off the phone and the Watch, then reboot the phone, go to the Watch app on the phone under Settings<Usage a and delete the software update. The reboot the Watch and start the update process again. The update went smoothly.
FWIW, I have both my Watch and my phone on chargers and next to each other when updating and I also turn off auto-lock on the phone. Just voodoo, but the 2.1 update only took a half an hour.