If I had a choice, I would stay with Watch OS 2.1. I truly don't like OS 3 at all. My original series watch runs more slowly, apps don't refresh and often times don't even connect even when I open the app on the iPhone. I hate the new dock set up. It's much clunkier than the glances in 2.1. If I could, I would go back to 2.1 in a second.
I don't think your original series watch has the processing power necessary for os3.
So, on my phone I'm getting the error that checking the update is not possible because it thinks it's not connected to the internet. But wiif is on and working...
Are the servers overloaded maybe?