Updated on October 30, 2017 – Looks like the issue has been fixed! In the Google product forums, a Googler posted, "This issue has been resolved. For those of you that faced the issue and were reverted back to 8.0, you will be offered a new OTA (which is rolling out now). Thanks to all of those that sent up reports, and helped us get to the bottom of this."
Among all of the excitement of a new Developer Preview release for Android 8.1 this week, we saw many reports of installation problems on both the new Pixel 2 and original Pixels. Whether you had snagged the factory image to install manually or waited for the OTA via the Android Beta Program, there was a decent chance you'd hit a snag during installation. Google has now acknowledged that there are some potential installation issues with this Dev Preview, taking to the Google Pixel product forums to ask for help from the community.
From the Pixel product forums:
We are collecting feedback about user reports of OTA installation issues on the 8.1 beta. If this is happening to you, can you post your experiences here? That will allow us to possibly reach out for bug reports or additional information.
The core issue for most people seems to be that the OTA for the Dev Preview will download and prompt you for installation, and then upon rebooting after the first phase of installation it simply goes through the boot animation a few times before returning you to your lock screen still on Android 8.0. Subsequent installation attempts don't seem to work, and most aren't finding joy in clearing the download and getting a new file.
At the time of writing the post already has dozens of replies, but no clear answers as of yet. The only fix for most people has been to perform a factory reset of their phone on Android 8.0 and then get the OTA to the 8.1 Dev Preview at that point. That's definitely a hassle, but of course one that isn't out of the norm for someone dabbling in "Developer" software. For now, take this as a bit of caution if you're considering enrolling in the Beta Program to grab 8.1 — but let's hope by providing Google with more information on the issue it can fix the problem going forward.
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