I'm not sure what causes this, but the toolchain does seem to work.
$ RUSTUP_DIST_SERVER=https://dev-static.rust-lang.org rustup update stable-i686-pc-windows-gnu
info: syncing channel updates for 'stable-i686-pc-windows-gnu'
info: downloading component 'rustc'
info: downloading component 'rust-std'
info: downloading component 'cargo'
info: downloading component 'rust-docs'
info: downloading component 'rust-mingw'
info: installing component 'rustc'
info: installing component 'rust-std'
info: installing component 'cargo'
info: installing component 'rust-docs'
info: installing component 'rust-mingw'
stable-i686-pc-windows-gnu installed - (error reading rustc version)
I'm not sure what causes this, but the toolchain does seem to work.