create table testing (retained int, dropped int)

insert into testing (retained, dropped)
select 767884, 157441 union all
select 1046261, 157441 union all
select 1055257, 	157441 union all
select 157441, 73635 union all
select 767884, 	73635 union all
select 1046261, 	73635 union all
select 1055257, 	73635 union all
select 1046261, 767884 union all
select 1055257, 	767884 union all
select 1055257, 1046261

select * from testing

-- consoidate records:

-- updates 6 records:

update b
set b.retained=a.retained
from testing as a
inner join testing as b
on b.retained = a.dropped

-- updates remaining 3

update b
set b.retained=a.retained
from testing as a
inner join testing as b
on b.retained = a.dropped

select * from testing

drop table testing

create table testing (retained int, dropped int)

insert into testing (retained, dropped)
select 767884, 157441 union all
select 1046261, 157441 union all
select 1055257, 	157441 union all
select 157441, 73635 union all
select 767884, 	73635 union all
select 1046261, 	73635 union all
select 1055257, 	73635 union all
select 1046261, 767884 union all
select 1055257, 	767884 union all
select 1055257, 1046261

select * from testing
ORDER BY dropped,retained;

WITH UpdateValues AS (
SELECT
    MAX(retained) AS NewValue,
    dropped
FROM
    testing
GROUP BY
    dropped
)
UPDATE t SET
    retained = uv.NewValue
FROM
    testing t
    INNER JOIN UpdateValues uv
        ON (t.dropped = uv.dropped);


select * from testing
ORDER BY dropped,retained;

DROP TABLE testing;

drop table dbo.testing 
create table dbo.testing (retained int, dropped int)

insert into dbo.testing (retained, dropped)
select 767884, 157441 union all
select 1046261, 157441 union all
select 6699, 	157441 union all
select 157441, 73635 union all
select 767884, 	73635 union all
select 1046261, 	73635 union all
select 6699, 	73635 union all
select 1046261, 767884 union all
select 6699, 	767884 union all
select 6699, 1046261

SELECT a.* 
FROM testing a
LEFT JOIN testing b ON b.retained = a.dropped
WHERE NOT EXISTS (SELECT 1 FROM testing i WHERE a.retained = i.dropped)

Have a try with this. It works by first selecting retained rows which don't get a mention in discarded rows, then left joining to self. Hope that makes sense

SELECT a.* 
FROM testing a
LEFT JOIN testing b ON b.retained = a.dropped
WHERE NOT EXISTS (SELECT 1 FROM testing i WHERE a.retained = i.dropped)

drop table dbo.testing
create table dbo.testing (retained int, dropped int)

insert into dbo.testing (retained, dropped)
select 972580	, 697688 union all
select 1354938, 	697688 union all
select 1354938	, 972580 union all
select 1555243, 	1354938