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I can confirm that running apt-get dist-upgrade as root worked for me. There was a couple of glitches, I had to ctrl-c out of one hanged process, but everything seems OK.
What ever the problem is with the update manager it seems to be only affecting the GUI.
I experienced the same problem when trying to update. I tried to switch servers by going to System > Administration > Software Sources and changing servers to the main server.
Another post suggested the command sudo do-release-upgrade from Terminal and I got it to work. I am not sure why it works, but I was able to get hardy installed
I tried upgrading from the alt cd because my internet is painfully slow, it continues to tell me i need to download 500+mb of packages and then i get a similar freeze to the previous posts...how do i get it to upgrade from the CD only?