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Help Sony Xperia Arc LT15a failed ICS update

According to PC Companion there is an update available for my phone. I start the update and when it gets just about half way through the second step "Preparing Computer For Software Update" it just stops. There is no error message. The update progress window just closes. I have no idea why this is happening. I am unsure if it is because I only have 63MB of free storage on my phone or if it has to do with only having 35.7BG available on my PC.
How do I fix this issue?

Please help

Kisses and kittens
-Megatron
 

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