Good News Guys!
As if this afternoon. Microsoft has simply removed the Update in question. It no longer appears in my Update list even if I check for updates. Update and error messages are simply gone. So I'm guessing they withdrew it and are working on it in the back rooms.
For all those of you who tampered with your partition limits. Well, it might have fixed your computer updates for now. But who knows down the road what it may bring.
I double checked right before seeing this, and yeah!
The link for it in Windows Update now has info on it about this problem, which is great!
They'll probably reissue it, and personally after finding out it requires physical access to your PC (and at that, only applies if you have Bitlocker on and in a certain configuration)