I have been updating multiple 2008 R2 servers in our enclave to 2012 R2 doing in-place upgrades (which I realize is 'not recommended' but for over a dozen of them I've done it without any real issue), but a MSQL server I tried to upgrade this weekend kept failing for some odd reason.
The server in question is a VM, and to do my upgrades I copy the Server2012.iso file file over to the local hard drive, extract it, and then run the setup.exe file. On this particular server when I do so, it runs for a bit and but then when it gets to around 92-93% complete for the "Getting files ready for installation" portion of the process (at the bottom says 'Expanding windows installation files (641 of 705 MB expanded)' or so) it errs out. The error message says "Windows cannot install required files. Network problems may be preventing Windows from accessing the files. Make sure the computer is connected to the network and restart the installation. Error code 0x80070005".
I ensured that the account I was logged in with (I'm RDP'ing to the server) was in the Domain Admins group and even tried running the installation logged in as local administrator.
I have plenty of C: drive space, 49GB.
The server is patched and updated with all its latest patches and updates.
It seems that the error code in question is almost certainly some kind of 'permissions' issue, but I cannot figure out exactly what the problem is so I can work around it. I even tried running setup.exe with "Run as administrator" but no dice, same crash at the same step with the same error message. Since I'm running the upgrade locally I can't imagine that any kind of true network issue would play into it, but even if that were the case the server never goes offline or otherwise shows any network related problems leading up to the error so I suspect that's a red herring.
Not sure where to turn now to see why this error message is occurring and how to resolve it?