[Samsung Gear Live] Prizoff:
The same situation!

My firmware build is KKV81, same as yours, and also can't update with OTA to the latest version

And this is in logcat output, while trying to update:

08-07 20:06:40.620 606-606/? I/SystemUpdateService﹕ onCreate
08-07 20:06:41.660 454-569/? I/ActivityManager﹕ START u0 {act=android.settings.SYSTEM_UPDATE_SETTINGS cmp=com.google.android.gms/.update.SystemUpdateWearableActivity} from pid 619 on display 0
08-07 20:06:41.720 606-606/? D/SystemUpdateActivity﹕ status=6 mobile=false batteryState=0 roaming=false lastCheckinTime=1407349343493 mSetupWizard=false
08-07 20:06:41.780 454-474/? I/ActivityManager﹕ Displayed com.google.android.gms/.update.SystemUpdateWearableActivity: +105ms
08-07 20:06:42.000 662-682/? W/bt-btif﹕ dm_pm_timer expires
08-07 20:06:42.000 662-682/? W/bt-btif﹕ dm_pm_timer expires 0
08-07 20:06:42.000 662-682/? W/bt-btif﹕ proc dm_pm_timer expires
08-07 20:06:43.620 606-606/? I/SystemUpdateService﹕ onCreate
08-07 20:06:43.650 606-1692/? I/SystemUpdateService﹕ network: NetworkInfo: type: PROXY[], state: CONNECTED/CONNECTED, reason: enabled, extra: (none), roaming: false, failover: false, isAvailable: true, isConnectedToProvisioningNetwork: false; metered: false; mobile allowed: true
08-07 20:06:43.650 606-1692/? I/DownloadAttempt﹕ current file is null
08-07 20:06:43.650 606-1692/? I/DownloadAttempt﹕ mSize -1 mDownloaded -1
08-07 20:06:43.650 606-1692/? I/SystemUpdateService﹕ status is 1 (ready)
08-07 20:06:43.650 606-1692/? I/SystemUpdateService﹕ starting download of http://android.clients.google.com/packages/ota/global_samsung_sprat/9463bb9866a01116311155b89e4aae4c436db98c.signed-sprat-KMV78Y-from-KKV81.9463bb98.zip
08-07 20:06:43.660 606-606/? D/SystemUpdateActivity﹕ status=2 mobile=false batteryState=0 roaming=false lastCheckinTime=1407349343493 mSetupWizard=false
08-07 20:06:43.660 606-1692/? I/SystemUpdateService﹕ now status is 2 (in_progress)
08-07 20:06:43.670 606-1693/? I/DownloadAttempt﹕ querying downloadmanager
08-07 20:06:43.690 606-1693/? I/DownloadAttempt﹕ mUrl is http://android.clients.google.com/packages/ota/global_samsung_sprat/9463bb9866a01116311155b89e4aae4c436db98c.signed-sprat-KMV78Y-from-KKV81.9463bb98.zip
08-07 20:06:43.700 606-1693/? I/DownloadAttempt﹕ including auth header <AUTH_HEADER_HEAR>...
08-07 20:06:43.710 606-1694/? I/SystemUpdateService﹕ network: NetworkInfo: type: PROXY[], state: CONNECTED/CONNECTED, reason: enabled, extra: (none), roaming: false, failover: false, isAvailable: true, isConnectedToProvisioningNetwork: false; metered: false; mobile allowed: true
08-07 20:06:43.710 606-1694/? I/SystemUpdateService﹕ now status is 2 (in_progress)
08-07 20:06:44.690 168-169/? E/clockwork_proxy_native﹕ Cannot find uid for tcp connection from 192.168.167.239:44849 to 212.0.195.142:80
08-07 20:06:44.690 1378-1453/? D/ClockworkProxy﹕ TCP connection requested by uid=-1
08-07 20:06:44.690 1378-1453/? D/ClockworkProxy﹕ TCP connection is not from a google app, closing it...
08-07 20:06:44.700 606-1693/? I/DownloadAttempt﹕ caught ioexception
java.io.EOFException
at com.android.okhttp.internal.Util.readAsciiLine(Util.java:342)
at com.android.okhttp.internal.http.RawHeaders.fromBytes(RawHeaders.java:311)
at com.android.okhttp.internal.http.HttpTransport.readResponseHeaders(HttpTransport.java:135)
at com.android.okhttp.internal.http.HttpEngine.readResponse(HttpEngine.java:644)
at com.android.okhttp.internal.http.HttpURLConnectionImpl.execute(HttpURLConnectionImpl.java:353)
at com.android.okhttp.internal.http.HttpURLConnectionImpl.getResponse(HttpURLConnectionImpl.java:297)
at com.android.okhttp.internal.http.HttpURLConnectionImpl.getResponseCode(HttpURLConnectionImpl.java:509)
at apc.b(SourceFile:328)
at apc.doInBackground(SourceFile:44)
at android.os.AsyncTask$2.call(AsyncTask.java:288)
at java.util.concurrent.FutureTask.run(FutureTask.java:237)
at java.lang.Thread.run(Thread.java:841)
08-07 20:06:44.710 606-1697/? I/SystemUpdateService﹕ network: NetworkInfo: type: PROXY[], state: CONNECTED/CONNECTED, reason: enabled, extra: (none), roaming: false, failover: false, isAvailable: true, isConnectedToProvisioningNetwork: false; metered: false; mobile allowed: true
08-07 20:06:44.710 606-1697/? I/SystemUpdateService﹕ now status is 5 (failed)
08-07 20:06:44.730 606-606/? D/SystemUpdateActivity﹕ status=6 mobile=false batteryState=0 roaming=false lastCheckinTime=1407349343493 mSetupWizard=false
08-07 20:06:44.730 606-1697/? I/SystemUpdateService﹕ download failed; clearing attempt
08-07 20:06:44.750 606-610/? D/dalvikvm﹕ GC_CONCURRENT freed 298K, 9% free 6140K/6724K, paused 3ms+11ms, total 41ms
08-07 20:06:44.760 606-1697/? V/SystemUpdateService﹕ retry (wakeup: true) in 19969 ms
08-07 20:06:49.230 454-483/? I/PowerManagerService﹕ Going to sleep by user request...

And the most interested part of this log is that:

08-07 20:06:44.690 168-169/? E/clockwork_proxy_native﹕ Cannot find uid for tcp connection from 192.168.167.239:44849 to 212.0.195.142:80
08-07 20:06:44.690 1378-1453/? D/ClockworkProxy﹕ TCP connection requested by uid=-1
08-07 20:06:44.690 1378-1453/? D/ClockworkProxy﹕ TCP connection is not from a google app, closing it...

I can say only that I do not like this very much... not sure if it can be fixed... Anyone has ideas how to proceed with OTA?