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Has anyone found a fix yet? I spoke with Apple for hours yesterday and all they could tell me was to send it back to Best Buy's.. I told them my replacement will probably have the same issue since I'm thinking this has to be software related. Sucks because I wanted to use this new S5 but it's a sitting brick at my house at the moment.

I finally fixed it, guys! This is what I did to get it to finally update... Hard reset apple watch > when the apple logo shows hold down the button next to the crown and hold for 30 seconds > select erase all settings and content. After watch resets > power down the watch do not hard reset, move the power slider to the right you might have to put in your wrist to do that and then put it back on the charger. On your iPhone sign out of iCloud completely > go to settings > general > scroll down > shut down iphone (do not hard reset) Power up Watch and then your iPhone > sign into iCloud/AppleID Start the pairing process > it should say your watch is now paired > select update > it will give you the update error again saying no internet but let it sit for a minute > boom it will start updating the watch. Headache is GONE hopefully! Hope this works for everyone because after trying everything these are the steps that I took you might have to try a few times but mine worked the very first try. Cheers!!