Looking around at your 2.3.5 milestone x device.
I notice alot of people bricking using your sbf file.
Sounds like there are issues from it and you cant install the update because of it.
First if you tried to update and it still failed, well my resolution.
Boot up in linux maybe ubuntu live to be safe
hook up your phone power on holding home+Vol down+power
should say usb at the bottom
Then run terminal
chmod +x sbf_flash
sbf_flash "your original sbf file to put to your carriers stock rom"
Unplug usb and reboot phone.
Why dont you try looking here for your original or current stock sbf file