9C59 error when installing IE10

Neither SFC scan nor CheckSUR scan show any problems.
However, the background CBS log does show these issues...

Code:

 Line 15141: 2013-12-27 13:35:38, Error                 CBS    Failed to pre- stage package: Microsoft-Windows-InternetExplorer-Package-TopLevel~31bf3856ad364e35~x86~~10.2.9200.16521 [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
 Line 15144: 2013-12-27 13:35:38, Error                 CBS    Failed to process single phase execution. [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
 Line 15164: 2013-12-27 13:35:38, Error                 CBS    Failed to perform operation.  [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]

From the other data there, I think that the problem is a corrupted folder - but before attempting to correct that, I need a little more data.
Please upload the file C:\Windows\windowsupdate.log file - it may give us more data to work with.

No real clues there - except that the IE10 install is failing for some unidentified reason.
Please upload the following file - C:\Windows\IE10_main.log
It may have a little more data.

Here's what I think are the important bits...

Code:

00:00.000: ====================================================================
00:00.249: Started: 2013/12/30 (Y/M/D) 07:44:54.952 (local)
00:00.280: Time Format in this log: MM:ss.mmm (minutes:seconds.milliseconds)
00:00.358: Command line: "C:\Windows\SoftwareDistribution\Download\Install\WU-IE10-Windows7-x86.exe" /WSUS
00:00.405: INFO:    Setup installer for Internet Explorer: 10.0.9200.16521
00:00.452: INFO:    Previous version of Internet Explorer: 9.0.8112.16526
00:00.483: INFO:    Checking if iexplore.exe's current version is between 10.0.8100.0...
00:00.514: INFO:    ...and 10.1.0.0...
00:00.608: INFO:    Maximum version on which to run IEAK branding is: 10.1.0.0...
00:00.655: INFO:    iexplore.exe version check success. Install can proceed.
00:00.702: INFO:    Operating System: Windows Workstation: 6.1.7601 (Service Pack 1)
00:00.748: INFO:    Trying to extract ID: SetupDownloadList.txt (0) as "SetupDownloadList.txt"
00:00.780: INFO:    Trying to extract ID: HardwareBlockingList.xml (0) as "HardwareBlockingList.xml"
00:00.811: INFO:    Trying to extract ID: 6006 (0) as "IE10-neutral.Extracted.cab"
00:01.092: INFO:    Trying to extract ID: 5501 (1033) as "Spelling_en.msu"
00:01.185: INFO:    Extracted Spelling dictionary for en to C:\Windows\TEMP\IE1ED3B.tmp\Spelling_en.msu.
00:01.232: INFO:    Trying to extract ID: 5502 (1033) as "Hyphenation_en.msu"
00:01.279: INFO:    Extracted Hyphenation dictionary for en to C:\Windows\TEMP\IE1ED3B.tmp\Hyphenation_en.msu.
00:01.372: INFO:    Trying to extract ID: 6128 (1033) as "IE10-support.cab"
00:02.511: INFO:    Launched program to check hardware: "C:\Windows\TEMP\IE1ED3B.tmp\IE10-SUPPORT\IEXPLORE.EXE" /CheckHardware "C:\Windows\TEMP\IE1ED3B.tmp\HardwareBlockingList.xml"
00:03.291: INFO:    Hardware support check succeeded. Installation will continue.
00:03.385: INFO:    Windows 7 operating system detected.
00:03.416: INFO:    Service pack major: 1
00:03.432: INFO:    Service pack minor: 0
00:03.463: INFO:    Service pack name:  Service Pack 1
00:03.478: INFO:    Version Check for (KB2670838) of C:\Windows\System32\api-ms-win-downlevel-user32-l1-1-0.dll: 6.2.9200.16492 >= 6.2.9200.16492 (True)
00:03.510: INFO:    Version Check for (KB2639308) of C:\Windows\System32\Ntoskrnl.exe: 6.1.7601.18247 >= 6.1.7601.17727 (True)
00:03.556: INFO:    Version Check for (KB2533623) of C:\Windows\System32\api-ms-win-security-base-l1-1-0.dll: 6.1.7601.18229 >= 6.1.7601.17617 (True)
00:03.650: INFO:    Version Check for (KB2731771) of C:\Windows\System32\kernel32.dll: 6.1.7601.18229 >= 6.1.7601.17932 (True)
00:03.681: INFO:    Checking for correct version of C:\Windows\Fonts\segoeui.ttf.
00:03.712: INFO:    Version Check for (KB2786081) of C:\Windows\System32\taskhost.exe: 6.1.7601.18010 >= 6.1.7601.18010 (True)
00:24.242: INFO:    IE Setup Language pack included: C:\Windows\TEMP\IE1ED3B.tmp\IE-Spelling-en.cab
00:24.367: INFO:    IE Setup Language pack included: C:\Windows\TEMP\IE1ED3B.tmp\IE-Hyphenation-en.cab
00:24.429: INFO:    Waiting for 0 prerequisite downloads.
00:24.476: INFO:    The neutral pack was not successfully downloaded from the internet. Installation will continue using the extracted package.
00:24.585: INFO:    No reboot logic message NrApiStart(0), lParam=0x001628a0 returned 0x00000000.
00:25.443: INFO:    No reboot logic message NrApiScan(1), lParam=0x00000001 returned 0x00000000.
00:25.506: INFO:    No reboot logic message NrApiStartInstall(4), lParam=0x00000001 returned 0x00000014.
00:25.537: INFO:    Installing with the extracted package. C:\Windows\TEMP\IE1ED3B.tmp\IE10-neutral.Extracted.cab
00:25.568: INFO:    Launched package installation: C:\Windows\System32\dism.exe /online /add-package /packagepath:C:\Windows\TEMP\IE1ED3B.tmp\IE10-neutral.Extracted.cab /quiet /norestart
00:35.552: INFO:    Process exit code 0x00000002 (2) [The system cannot find the file specified. ]
00:35.599: ERROR:   Neutral package installation failed (exit code = 0x00000002 (2)).
00:35.630: INFO:    No reboot logic message NrApiInstallDone(7), lParam=0x00009c59 returned 0x00000000.
00:35.661: INFO:    No reboot logic message NrApiStartFinish(11), lParam=0x00000000 returned 0x00000000.
00:35.708: INFO:    No reboot logic message NrApiFinish(12), lParam=0x00000000 returned 0x00000016.
00:35.771: INFO:    Waiting for Active Setup to complete.
00:35.802: ERROR:   Couldn't create setup troubleshooting shortcut on the desktop. HRESULT: 0x80070002,
00:35.833: INFO:    Setup exit code: 0x00009C59 (40025) - The neutral cab failed to install.

I'll have to do some research on this.