I'd say from reading all this that error 1 is a hardware problem caused by dry solder joints somewhere in the phone. Heating up the phone will basically improve the solder joints. This is risky though as you could also make other joints worse.
By putting the phone in the freezer and cooling it down you are decreasing the resistance of the poor joints, probably just by enough to get a good enough connection to finish the update.
Just a theory from applying a bit of logic. Now all we need is someone to identify exactly which solder joints are poor.