So my console has the broken disc drive. I get the error, this is how I got around it.Plug your controller in and restart the console. At the screen with the error, the controller appears to be off but you can hit Circle to go back. Hit circle and the screen turns off. Hold the PS button on the controller and console comes back on, says it's checking storage, reboots after it hits 100% and starts normally....This worked for me but your results may vary. Unfotunately, the update is still there and I have decided not to update (which won't let me sign in, play, ect) until there is more info on how to get around the bad drive. But at least I'm not booting into the error screen.
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