Ouya incorrectly reporting 0.00B of free space on internal memory

[vatigo]

From the Advanced settings I can see that there are a bit more than 500MB of free space on the internal storage but when I try to install anything the pop-up window shows that I have 0.00B of free space and won't let me install on the internal storage.
I have USB memory attached and I can install the game there and later move it to my supposedly full internal memory.

Deleting games doesn't help.
I did a power cycle and tried removing the USB stick but it didn't help.

It's a stock OUYA firmware (Chupacabra)