I'd try rebooting watch and phone, and if that doesn't work try unpairing and re-pairing. Not sure what else you could try. It loaded fine for me... only took about a half hour start to finish.
When I went to bed, I put my Watch on my charger right next to my phone, as usual. I opened the Watch App, which had a Red 1 next to it, and I clicked to install the update. When I woke up in the morning, it was done and both the Watch App and the Watch showed it was on OS 2.1.