Might have found the issue.
After downloading the new installer for 6 hours, reinstalling and getting the exact same error... I accidentally hit the "send email report" button.
The email report did not send because my ISP is blocked by Barracuda Reputation. Whatever THAT is.
Perhaps some essential part of the download is being blocked by the same thing that just blocked sending the email report?
I can't change my ISP. So it looks like I can't check out Lammania anymore. Won't have time to arrange to go to a friend's place and get the update.
But if I get the same problem when this goes live I can go to a friend's place and get the update and hope it works when I get home.
EDIT: WinXP getting same error but updating in the background.