I'm having an issue here as well.
I'm stock, except I did enable wifi tethering.
I can't update via CWM or OTA, because I get an error during the process.
I tried to pull the system folder out of 4.2.1 and flash that through CWM, but I also get an error when it checks the current system.
EDIT: I finally got updated. It was serious scare for a bit though. The toolkit really messed things up at first. I had to flash back to 4.2.1. After using the toolkit and having failed attempt after failed attempt, I realized I had to reflash the stock recovery first. I was then able flash the stock 4.2.1 image, reflash CWM recovery, and use CWM to install the update. There are still things that are screwy, and I've lost root (the root restore app isn't seeing it as being recoverable, but I'm tired and probably missing something). Anyways, most of my data is in tact, aside from a couple odd issues, so the rest I'll deal with tomorrow. The device does feel more responsive, so I suppose it was worth the bother, but I definitely will not be installing that tethering mod again.