If your problem persists get yourself a micro USB cable (sold separately), you can restore your Apple TV from iTunes:
- Remove ALL cables from Apple TV. (if you don't you will not see Apple TV in the iTunes Source list)
- Connect the micro USB cable to the Apple TV and to your computer.
- Reconnect the power cable (only for Apple TV 3)
- Open iTunes.
- Select your Apple TV in the Source list, and then click Restore.
If when you choose restore you get a message that the device cannot be found, download the file below
Then hold down the option key while choosing restore and select the downloaded file when prompted.
I found a posting here that indicated there was a problem with the latest update via wired ethernet.
I unplugged the ethernet cable, went into Apple TV settings and connected wirelessly, rebooted the Apple TV by unplugging and replugging the power cord, then tried the update again and it was successful.