I think there are two different issues here...
Just to be clear there are two sets of patches, client patches and content patches... The client patches are all relatively small and should be fast. The content patches are larger (but really the first one is very large because it has all the game content). You mention above it got to 100% of downloading a patch and went to applying state. That is normal and the first patch may take some amount of time to apply. After the first patch finishes the rest of the patches should be much smaller and quicker.
The second issue is with deflating corrupted patches. This is strange and I am investigating
Here is a manual work around to get a snapshot of the latest content (only requires one tiny patch after downloading):
I have put the whole snapshot image at:
http://patching2.fantasyrealmonline.com/fro/MoonHaven.zip
its 423 megs probably 1/2 - 3/4 of all the patches combined...
After you have the file downloaded you will need to do the following:
1. Open the root of your fantasyrealmonline directory (likely c:\program files(x86)\fantasy realm online)
2. Open the content directory in the root folder...
3. rename the Moon Haven Folder to Moon Haven _Back (This if things dont go well)
4. Unzip the downloaded file
5. Copy the Moon Haven Folder to the content directory (make sure your zip extractor program didnt nest it in additional folder... directly in the Moon Haven Folder should be content, patches and previews folders)
6. Run the client patcher
7. You should only need 1 content patch which is very small.
Let me know if you hit any issues :-) Hopefully all goes well.