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I’ve run into this quite often when loading new machines or reloading used machines that have become corrupted by the users.
The way I get around this is to ignore the patch and just carry on installing software and other items with the Auto Update turned off and eventually the Patch will install itself after enough time has passed. It seems that a lot of the download gets cached and when you attempt to apply that patch it reads from the cached download which has been corrupted.
If it is on a running unit that has been that way for a while run all the usual scans in Safe Mode like the AV and Spy Ware scans just to make sure that the unit is clean.
Deleting all the items in the Windows and users Temp folders doesn’t hurt either but the important thing is to do this all with the Auto Update function turned off and then manually try to apply the patch after deleting any files in the temp folders. For the Users Temp folder you’ll need to go into View in the Control Panel and enable showing of hidden folders.
I had an almost identical situation. It happens if
A. Update components are missing or corrupted.
B. Temp folder of Windows Update has corrupted files.
C. Windows Update services not configured correctly.
A) Re-register Windows Update components
1. Click on Start and then click Run,
2. In the open field type “REGSVR32 WUAPI.DLL” (without quotation marks) and press Enter.
3. When you receive the “DllRegisterServer in WUAPI.DLL succeeded” message, click OK.
4. Repeat these steps for each of the following commands:
B) Rename temp folder of Windows Update.
1. Click Start, Run, type: cmd and press Enter. Type in “net stop WuAuServ” (without quotations) and press Enter.
2. Click Start, Run, type: %windir% and press Enter.
3. In the opened folder, rename the folder SoftwareDistribution to SDold.
4. Click Start, Run, type: cmd and press Enter. Type in “net start WuAuServ” (without quotations) and press Enter to restart the Automatic Updates service.
C)Check the local Windows Update services
1. Click Start->Run, type “services.msc” (without quotation marks) in the open box and click OK.
2. Double click the service “Automatic Updates”.
3. Click on the Log On tab, please ensure the option “Local System account” is selected and the option “Allow service to interact with desktop” is unchecked.
4. Check if this service has been enabled on the listed Hardware Profile. If not, please click the Enable button to enable it.
5. Click on the tab “General “; make sure the “Startup Type” is “Automatic”. Then please click the button “Start” under “Service Status” to start the service.
6. Repeat the above steps with another service: Background Intelligent Transfer Service (BITS)