Do the update manually and here is how you do it.
1. Find a usb drive that is larger than 168 MB and format that drive to FAT32.
2. A computer.
3. Download the newest firmware from the computer (2).
4. Go inside the usb drive and make a new folder which you call PS3, and under that you make another which you name UPDATE. Under that folder is where you keep the firmware (3).
5. Plug the usb drive into the ps3 and power it.
6. In the XMB go to Settings ---> System Update ---> Update via Storage Media.
Source(s):
PS3 Firmware
http://j.mp/9uWzDs
Partition Wizard Home Edition
http://adf.ly/7JCH
PS3 Manual - Update using a PC
http://adf.ly/7JD5
XMB
http://adf.ly/7JCj