The first time I tried installing the 8.1 update I got the same error message.
I've tried it yesteday again after doing the following:
Installed the latest Important update from Microsoft
Updated my Intel RST drivers to the latest version = 12.8.0.1016
Updated AMD Display Drivers to the latest beta drivers (finally was able to install these without BSOD)
Rebooted PC, Installed 8.1 update. The entire process was done quickly without crashes or BSODs now.
So somewhere along those 3 steps there's a fix but can't say exactly which one as I did them all at once.
This may of course not work for everyone (like Nvidia users) but it doesn't hurt to try.