My issue is very similar but I actually had some success after the blue screen.

My story
1. Mk IV unit in 2005 E46 M3 running 4-1/50
2. Burnt a v32 cd
3. Updated according to procedure, all went fine as far as "CD-ROM in navigation computer. Loading Software"
4. Update did not progress to the next screen (progress bar) - went BLACK!
5. Waited 20 mins and no change in status so turned ignition off
6. CD-ROM very tricky to eject and display boots in the blue screen like the OP
7. Waited a day and looked for some ideas.
8. Burned a v24 disc
9. Disconnected power cable from mk4 unit for 5 mins
10. Reconnected power cable
11. Turned on ignition, started engine, door open, boot open
12. Loaded v32 disc and waited...
13. 5 mins later the progress bar appeared and process completed to the end.... but message at the end was "Update Unsuccesfull". Unit reboots in blue screen.
14. Ejected disk (bit of a faff)
15. Disconnected mk4 power for a few minutes
16. Loaded v24 disc and waited
17. 5 mins later the progress bar appeared and process completes successfully! Disc self-ejects and unit reboots successfully (in German), with all options.
18. Didn't disconnect power on Mk4 unit this time, just inserted the V32 CD but this was again unsuccessfull. Unit reboots in blue screen.
19. Despite power cycling the mk4 unit, it won't now reload the known good v24 disc, or the v32 disc.
Any ideas?