quick update: I tried updating to firmware version 1.2.2 and that actually works! So after that I tried 1.3.2 again but the unit still refuses to boot 1.3.2. The update process is successful but after the required reboot the machine is still reporting version 1.2.2. Is there a known issue with 1.3.2 maybe?
As for the “fan stalled” warning. Does this warning just mean the fan is not spinning currently but the fan will spin-up when the console gets hot? Or does this actually indicate a broken fan?