** Work Around Suggestion **
Same issues here. First, watch battery dying w/in several hours, then software update not completing (stuck Preparing). All started today, after my phone updated last night. Checked the Battery on my watch and it shot to 100% the moment 17.4.1 installed on my phone. The issues are 100% related to the update.
First I powered off both devices entirely for 5 minutes to clear any connections & cache. Then I powered them both back on. I temporarily disabled bluetooth on my Phone to stop any communications between the two. I then temporarily disabled the "Auto" software update from the phone: Open the Watch App > General > Software Update > Automatic Updates > toggle OFF. Next I deleted the Update from my Watch - On Apple Watch, go to Settings > General Storage > scroll down and touch watchOS 10.4 > Delete. After this, bluetooth on the phone can be enabled again. The update should not auto-anything since that's been disabled. The two won't be on the same OS build but at least the watch stays charged for more than a few hours!
My watch is charging normally again and the phone should not update it automatically, so I'm going to wait a week or two and try again. While isn't a fix, it's a relevant work around to get someone through a 10K this weekend. If the issue doesn't resolve itself in a week or two, give it a few more weeks and an entirely different update will be released.