Very bizarre. As I just went to shut off the machine, I noticed the update icon on the Start menu Shutdown button. I went ahead with it, and windows is now apparently installing one update. I can only surmise that update is the update agent itself. But how on earth did that get through this problem? Will add info as I get it.
The update hung for half an hour. I hit the power button, but that sent it into sleep or hibernation rather than shutting it off. Then I turned it off all the way. When Windows resumed, the update came back on. It took several minutes, but this time it apparently did take. Now back in Windows, I tried to update again, but nothing is changed. BTW, when the error occurs, it's immediate, as if there were no internet connection.
Since I switched it to automatically download and install, Windows has been grabbing as many downloads as it can and installing when I shut off. First it was 7, now 9, plus whatever it does while the system is up. Yet it still won't install the update agent.