I’ve been having a lot of issues with this as well (Series 2 iWatch). Trying to restart the phone and iWatch but to no avail. I think switching out the screen will help but in my situation the old screen was non functional (the display was completely out). I’d thought I try something crazy and it worked! I attached the two ribbons (closest to the digital crown) to the new display, then I attached the last ribbon (furthest from the crown) to the old display. After doing this the watch paired after the first try. Hope this helps some people. It was really frustrating looking for solutions all over the web but this worked like magic.