OK so you have 33M available on /

AFAIK that should be enough. The patch itself is relatively small (a couple of MB I think), but who knows what artificial limits the application manager is using (in my case it complained because I had 17% battery left, which in my case means about 10 hours left).

You could perhaps try doing the update from OVI suite (if you use Windows).

Otherwise you would still have to free some (unspecified) amount of memory off the root file system. The problem is how

Have a look here: http://wiki.maemo.org/Free_up_rootfs_space
and see if there's anything you can do.