I've been having this same issue for months and must give a BIG thank you to sdrawkcab25 for the solution.
While following sdrawkcab25's directions one thing different occured. After starting with the Volume Down-Power Button combo the white screen came up. While I was reading his instructions again, the screen changed by itself after a couple seconds, I did not have to manually go to the "recovery" menu. This all happened quickly so I did not see what specific screen was up. The install proceeded automatically at that point. After that the phone restarted a couple times. Then the "droid-eyeball" appeared and it looked like the phone was stuck. But just give it time (maybe 3-5 minutes on my phone) and it will eventually re-boot (maybe twice), and it is a longer than normal reboot, just be patient, and now all is well!
A couple of other things I did first that may or may not have helped, but if you still have a problem do these too:
-I moved most all apps that could to the SD card.
-I cleared the cache for the biggest apps (settings/applications/storage use/menu(at bottom of phone)/sort by size if not done...then pick the 5-10 biggest apps and "clear cache", also if you are careful you can "clear data" on some, but that will wipe logins, saved info, etc. so only do if you know what your affecting, if in doubt...don't).
-I cleared the process cache (settings/applications/running service/menu(at bottom of phone)/show cached processes...then pick each and "stop").
-make sure you rename the file "update.zip" and that it is in the root directory of the SD card.