Maybe your SD card/emunand has gone corrupt. Maybe try a fresh SD card, format emunand onto it and see if you can update that to 10.4 If that works, then you know what the problem is and decide how you want to proceed.
I have a Old 3DS with unliked nands using Rxtools and my Emunand is in 10.3.0-28U
when I tried to update it give me a error saying to hold the power button and try again
When I update from 9.2 to 10.3 my 3ds was on linked nands, maybe is that?
Ahh this looks to be more serious than what I thought. Looks to be a corrupted emunand partition like ddurdle said. I'm not sure if that emunand can be fixed now.