TIme Machine Issues after Catalina Update?

Hi upperwaters,

Thanks for the post! We saw you're having an issue with Time Machine and you've done some troubleshooting already. Backing up is very important and we're happy to assist.

When you see the "freeing space" message, does it appear to be making any progress? How long have you left it running? It sounds possible that this resource, titled If Time Machine remains in the “preparing” stage on Mac, could apply as you mentioned it started after updating macOS:

"The preparation stage can also take longer if:

• The previous Time Machine backup was interrupted.
• The Mac wasn’t shut down properly.
• A disk was disconnected from your computer before being ejected.
• A software update was recently installed.
• You used your Mac for several days without performing a backup. This can happen if the backup disk was disconnected."

If that doesn't help, based on the steps you've tried already, we'd recommend contacting Apple directly to look into this further: Get Support

Take care.