Well finally heard from Microsoft support, here is what I got:
"From the information provided I see you are receiving error code 80070017 when trying to update your Windows phone. This error indicates an issue with your computer contacting Microsoft update, this is necessary for updates to come through to your phone. There is additional information regarding this error on the Windows forum here. One thing I would try doing before any other troubleshootin would be try and run and install available Microsoft updates for your PC. Please do this without the phone connected to the PC."
I don't buy it. My PC has given me no issues, and I always keep it up to date. Not to mention that I've tried updating my phone now on three different PC's. Guess I'm stuck never getting TANGO.