How do I troubleshoot the updgrade process of  my ASUS Transformer to 3.2.1?
For a manual approach, I found a download link for the Firmware off the Asus site.

I think my mistake earlier was in the download pages OS selector I looked at WinXP, Win7, never considered (or noticed) that Android was an OS option.

Then you download and unzip the 250 meg file.

Then you copy it to an SD card, with ASUS as the folder at the root. 

Pop it into the Tranformer, and you get a notification that it is preparing the SD card, and then that there is a Software Update available.

At that point, you are at the same basic functionality as the Over The Air upgrade path.  Make sure you are plugged in (or do not run out of power). 

However, this is a workaround, as opposed to fixing the core issue, of why the OTA upgrade was not available.