I just see this screen below. I've tried to begin pairing multiple times and I get past the scanning screen and sometimes past the T&Cs but no further. The watch hasn't been paired before.
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Have you updated iOS to 8.3? If that doesn't help, i suppose its possible you got a bad-out-of-box watch. – Tyson Jun 12 '15 at 12:29
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I am on iOS 8.3. – Steve Moser Jun 29 '15 at 15:31
After power cycling the watch it offered to reset to factory settings. Then it failed once more before working the next time.
Also the first time it failed might have been because I was interrupted by a phone call.