Official Microsoft response has arrived...
"From the case log, I understand that Automatic Update didn’t work. If I have misunderstood your concern, please don’t hesitate to let me know.
I understand the inconvenience you have experienced. Please be assured that I will do my best to help you.
This issue can be caused by the following factors:
1. Some third-party programs affect.
2. Corrupted Windows Update Temporary folders.
3. Windows Update service is not started.
In order to narrow down the cause of this issue and resolve it, please refer to the following steps. After finishing each step, please check the result again on the Windows Update website.
NOTE: Some third party programs can affect the Windows Update service. If you are running any third party applications such as Spyblocker, Internet or web accelerators (programs designed to boost the speed of the Internet connection), security or anti-virus programs (Norton, McAfee, etc.), I recommend we temporarily disable or shut them down and then try accessing Windows Update later Please understand that we are disabling these programs only for the purpose of troubleshooting and we can re-enable these programs after we finish troubleshooting.
Step 1: Clean Boot
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This method will help us determine if this issue is caused by a loading program or service. Please perform the following steps:
1. Click the "Start" Button, type "msconfig" in the search bar and press Enter.
Note: Please click the Continue if the "User Account Control" window pops up.
2. Click the "Services" tab, check the "Hide All Microsoft Services" box and click "Disable All" (if it is not gray).
3. Click the "Startup" tab, click "Disable All" and click "OK".
Then, restart the computer. When the "System Configuration Utility" window appears, please check the "Don't show this message or launch the System"
4. Test if we can update the system in Clean Boot.
Note 1: Temporarily disabling the Startup Group only prevents the startup programs from loading at startup. This shouldn't affect the system or other programs. We may still manually run these programs later.
Note 2: We can check on Normal Startup in the General tab to roll back to Normal Mode after we get this issue resolved.
If the issue persists, please take the following steps to rename SoftwareDistribution folder.
Step 2: Rename the Windows Update Softwaredistribution folder
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This problem may occur if the Windows Update, Software distribution folder has been corrupted. We can refer to the following steps to rename this folder. Please note that the folder will be re-created the next time we visit the Windows Update site.
1. Close all the open windows.
2. Click the "Start" Button, click "All programs", and click "Accessories".
3. Right-click "Command Prompt" and click "Run as administrator".
4. In "Administrator: Command Prompt" window, type in "net stop WuAuServ" (without the quotes) and press Enter.
Note: Please look at the cmd window and make sure it says that it was successfully stopped before we try to rename the folder. However, if it failed, please let me know before performing any further steps and include any error messages you may have received when it failed.
5. Click the "Start" Button, in the "Start Search" box, type in "%windir%" (without the quotes) and press Enter.
6. In the opened folder, look for the folder named "SoftwareDistribution".
7. Right-click on the folder, select "Rename" and type "SDold" (without the quotes) to rename this folder.
8. Still in "Administrator: Command Prompt" window, type the command "net start WuAuServ" (without the quotes) in the opened window to restart the Windows Updates service.
Note: Please look at the cmd window and make sure it says that it was successfully started. However, if it failed, please let me know before performing any further steps and include any error messages you may have received when it failed.
If the issue persists, please continue try Step 3.
Step 3: Verify the relevant Windows Update services
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1. Click the "Start" Button in the "Start Search" bar, type: "services.msc" (without quotes) and press Enter. If you are prompted for an administrator password or confirmation, type the password or provide confirmation.
2. Double click the service "Windows Update".
3. Click on the "General" tab; make sure the "Startup Type" is "Automatic" or "Manual". Then please click the "Start" button under "Service Status" to start the service.
4. Please repeat the above steps with the Background Intelligent Transfer Service (BITS).
You can also temporarily stop these services, restart the computer, and then start these services again. If any service is missing or cannot be stopped or restarted, please let me know."
Although this problem was annoying me, I am not in a big hurry to correct it when I read all that it may entail. If and when I do undertake these courses of action, I will notify the forum of how it turns out...Rick