Have downloaded several ROMS but all had ERROR 266 and that was the only error that is not found because it is happening.
Put the phone in Update/Recovery mode (turn it off, press and hold the Camera button, turn it on again, keep holding the Camera button until it goes to the black-and-white screen indicating that you should connect the phone to the PC). Connect your phone to the PC using the normal USB cable. Start the Zune software. After a few seconds, Zune should offer to restore your phone to the backup that was created prior to beginning to flash the update.
That will make the phone boot again, without losing any data. Afterward, you can try updating again. Hope that helps, good luck!