To clarify, the following should be the steps to take. Can you try these again and verify whether or not it is successful? I’ll contact Qolsys to make sure there is no issues at the moment with the process.
1- From the IQ Panel touch “Settings”
2- Enter a valid installer code (default is 1111)
3- Touch “Installation”
4- Touch “Upgrade Software”
5- Touch “Patch Tag” and enter the patch iq216 then touch Done, then OK
6- Touch “IQ2 Panel Upgrade Using Network” and the update will download
7- Press OK when prompted to send the update over the WI-FI network to any IQ2’s that are paired with the panel.
8- Follow the on screen prompts on the IQ2 to accept and install the 1.6 update. Once installed the the IQ2 will relaunch the software. Verify that it has been successfully updated by going to Apps>About. The Software Version should read: IQ2 - 1.6