I also had a hard fight trying to install the update, but only got the same message. Installed the game at least 4 times, but after a bit of searching the web, and a bit of experimentation here's what I did:
Run/regedit -> LOCAL_HOST/SOFTWARE/Bohemia Interactive Studio/ARMA 2
the register MAIN, in my case had the default path ("C:\Program Files\Bohemia Interactive\ArmA 2"), what I did, was set the value to my installed path, which is D:\Games\Arma 2 and the patch installed whithout no problem.
Hope it helps. :)