I'm puzzled (not that rare an occurence). My Nexus 7 said "do you want to upgrade to Android 4.3?" So I said yes, and it did. End of story. How come you had to do manual fiddlerery? I suspect the answer could well be in Kimese, and will leave me failing in the understanding dept, but I'll give it a try anyway...
Mine was rooted, with a third party recovery
[1] installed and some minor modifications made to seekrit system files. When the OTA update tried to install, it saw that what it was trying to install over wasn't what it expected and refused to continue. Hence to upgrade it needed a re-image with the start-again-from-scratch version of 4.3 (or an unmodified 4.2 so the updater would work). However, since doing that would have involved a factory reset and lost all my settings, I pulled the individual partition images out of the zip file and applied them by hand using the debugger tools, skipping the bits that overwrite the user data. Then I just had to re-install the binary for root access and I was back where I started, but with 4.3.
Not actually as complicated as it sounds, and most of the tricky stuff is what you'd have to do to obtain root access in the first place. If you don't care about root, this can all be safely ignored.
I should also add that an update to MX Player has been released, and it now works fine in 4.3. There have been a flurry of updates to other apps, too.
[1] Recovery is a sort of halfway stage between the bootloader and Android itself. Third-party ones like ClockworkMod or TWRP provide useful extra features, like the ability to make and restore full backup images of everything on the device.