Patch 1.60 has hit steam, so the server should be updated by the time you read this.

To avoid having to download 2.6 gigs through steam's dying content servers, you can try the following:

  1. Download the patch manually from there should be at least one fast mirror.
  2. Copy your arma2 folders from steamapps to a temp dir. This is your backup in case of emergency!
  3. Run the patcher.
  4. Verify game cache integrity.

No guarentees! *Probably works best if Steam hasn't started to download the new version already*.

E: Setting steam not to update just means it doesn't look for patches when you're not doing anything else. It'll still check when you try to launch the game. So it's good practice to have it set to not update, then you can try to use the workaround above.