Windows 7 - Upgrade Fails Install After KB976902 Update

Four days ago I did a Windows Update for KB976902. Ever since then, update has failed to work. Restore to a prior state did not work. Chkdsk, MS FixIt, sfc, etc. have failed to run or failed to work.

I had hoped that the Repair Install might do it. Unfortunately, at Step 10 (after 100% of files have been copied / 2768 Mb), I get the following message:
[IMG]file:///C:/Users/MichaelM/AppData/Local/Temp/moz-screenshot-2.png[/IMG]
"Setup can't continue. Restart the computer and restart Setup. When prompted, try getting the latest updates."

I've tried this twice with the same result. I am running Win 7 Professional x64 on a 60gb SSD. Custom i7 build w/4gb ram.

I strongly suspect it is the same problem the prevents Windows Update from working correctly. TrustedInstaller.exe uses 13% of the CPU cycles without accomplishing anything. Additionally, there is an error generated every 2-3 seconds TrustedInstaller.exe is running. I can only stop the error messages by manually stopping the wuauserv service. There are 3 basic messages, of which one is shown at the bottom.

Anyone encountered or solved this problem?? I recognize that I can do a fresh install, but I want to avoid it because of the great hassle in reloading everything. In fact, except for updates, the system runs as stable and fast as ever. That makes me think there is a relatively simple fix.

Thanks and sorry for the length of this message.

Fault bucket , type 0
Event Name: WindowsWcpOtherFailure3
Response: Not available
Cab Id: 0

Problem signature:
P1: 6.1.7601
P2: base\wcp\sil\merged\ntu\ntsystem.cpp
P3: Windows::Rtl::SystemImplementationirectRegistryProvider::SysOpenKey
P4: 3676
P5: c0000034
P6: 0xda154ce7
P7:
P8:
P9:
P10:

Attached files:
C:\Windows\Logs\CBS\CbsPersist_20101122004601.cab
C:\Windows\Logs\CBS\CbsPersist_20101216070019.cab
C:\Windows\Logs\CBS\CbsPersist_20110113025631.cab
C:\Windows\Logs\CBS\CbsPersist_20110117154235.cab
C:\Windows\Logs\CBS\CBS.log
C:\Windows\servicing\Sessions\Sessions.xml
C:\Windows\winsxs\poqexec.log
C:\Windows\System32\LogFiles\Scm\SCM.EVM
C:\Windows\Logs\CBS\FilterList.log

These files may be available here:


Analysis symbol:
Rechecking for solution: 0
Report Id: 81666844-2453-11e0-8119-20cf30780640
Report Status: 0