I also got it running again just now. I took a different approach though:
-Deleted c:\Users(user)\appdata\local\packages\Microsoft.FlightSimulator_8wekyb3d8bbwe\systemappdata\wgs everything in that folder.
-disconnected internet
-started the sim
-several 'your’re offline blabla messages will appear, until you end at an XBOX popup giving you the options to abort or retry connection
-reconnected the internet
-selected reconnect
-update starts
Now it gets a bit confusing, I don’t know if it worked because of it or despite…:
-I chose a different folder that what I used before, full 100+GB download started
-I aborted by closing the window
-restarted the sim
-now I was asked if I’d like to keep the cloud or local profile
-choose local
-update process starts again
-now chose the already existing folder
-nothing downloaded, sim starts ans is fine again
Downside: logbook deleted (doesn’t bother me), controls and other settings deleted.