Update: Microsoft's Joe Belfiore just commented on Twitter "It was a "packaging problem" with the update. Try again and it should work." He then goes on to say "Still working on the "low storage" install prob 80188308. Note, this is not USER storage you can clear- it's install partition. Sit tight."
Microsoft may have finally addressed installation problems with the Windows Phone 8.1 Update 1 Preview for Developers. The issue initially started when Update 1 for Windows Phone 8.1 Preview began on Monday and a few users downloaded the update, but it would not install. The associated error code is 8018830f, and Microsoft's Joe Belfiore tweeted that they were investigating.
Ever since yesterday, we have received a few tips that those with the previous 8018830f error are now getting Update 1 to their phones. However, within the last hour we have received multiple tips from users who are now being alerted to the update being available, along with a successful installation. The fix may also address those with the even more rare 80188306 error.