.Net Framework 3.5 SP1 Fails to Install

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Error:

Description:
Microsoft .NET Framework 3.5 SP1 has encountered a problem during setup. Setup did not complete correctly.
Problem signature:
Problem Event Name: VisualStudio8Setup
Problem Signature 01: 35101
Problem Signature 02: 3.5.30729.01_ORCAS_X86_NET
Problem Signature 03: CBS
Problem Signature 04: INST
Problem Signature 05: F
Problem Signature 06: gencomp750,{61040379-156d-4ece-b126-ea395a3b2
Problem Signature 07: BASERET_UNKNOWN
Problem Signature 08: -
Problem Signature 09: -2147418113
Problem Signature 10: WUSA
OS Version: 6.0.6001.2.1.0.1296.17
Locale ID: 1033
Additional information about the problem:
LCID: 1033

 

You may see errors such as the following in your windowsupdate.log

2008-06-29 23:38:11:732 1012 f68 Misc WARNING: LoadLibrary failed for srclient.dll
with hr:8007007E
2008-06-29 23:38:11:732 1012 f68 Setup Staging setup package
"WUClient-SelfUpdate-ActiveX~31bf3856ad364e35~amd64~~7.1.6001.65"
2008-06-29 23:38:15:669 1012 f68 Setup WARNING: CBS staging operation failed, error
= 0x8000FFFF
2008-06-29 23:38:15:669 1012 f68 Setup FATAL: Failed to stage setup package
"WUClient-SelfUpdate-ActiveX~31bf3856ad364e35~amd64~~7.1.6001.65", error =
0x8000FFFF
2008-06-29 23:38:15:669 1012 f68 Setup WARNING: Failed to stage applicable setup
packages, error = 0x8000FFFF
2008-06-29 23:38:15:669 1012 f68 Setup FATAL: Downloading binaries for SelfUpdate
failed, err = 0x8000FFFF
2008-06-29 23:38:15:669 1012 f68 Agent * WARNING: Skipping scan, self-update
check returned 0x8000FFFF
2008-06-29 23:38:15:810 1012 f68 Agent * WARNING: Exit code = 0x8000FFFF
RPC calls to cryptsvc are failing because the Network Service account can not read
the root.
You might also see errors in the event log such as:
Log Name: Application
Source: ESENT
Date: 7/2/2008 3:05:16 PM
Event ID: 491
Task Category: General
Level: Error
Keywords: Classic
User: N/A
Computer: anantdevpc2.redmond.corp.microsoft.com
Description:
Catalog Database (1560) Catalog Database: An attempt to determine the minimum I/O
block size for the volume "C:\" containing "C:\Windows\system32\CatRoot2\" failed
with system error 5 (0x00000005): "Access is denied. ". The operation will fail
with error -1032 (0xfffffbf8).

 

Snippet from the CBS
2008-08-12 01:02:19, Info CBS WER: Generating failure report for package: Package_for_KB948609~31bf3856ad364e35~x86~~6.0.6001.3053, status: 0x8000ffff, failure source: Resolve, start state: 0, target state: 7
2008-08-12 01:02:21, Info CBS Exec: Processing complete. Session: 29949001:229928128, Package: Package_for_KB948609~31bf3856ad364e35~x86~~6.0.6001.3053, hr: 0x8000ffff

You might also see errors in the Event Log such as:

Log Name: Application
Source: ESENT
Date: 7/2/2008 3:05:16 PM
Event ID: 491
Task Category: General
Level: Error
Keywords: Classic
User: N/A
Computer: anantdevpc2.redmond.corp.microsoft.com
Description:
Catalog Database (1560) Catalog Database: An attempt to determine the minimum I/O
block size for the volume "C:\" containing "C:\Windows\system32\CatRoot2\" failed
with system error 5 (0x00000005): "Access is denied. ". The operation will fail
with error -1032 (0xfffffbf8).

Resolution:

Cause determined after comparing various logs that the Cryptographic Services runs under “Network Service” which would require Users to have read access.  Provided BUILTIN\Users with read access permission to Drive C and the .Net Framework 3.5 SP 1 installed successfully

Important Note: This may vary in some machines and the error message may be also different, in that case feel free to contact me or E Mail me. As .Net Framework 3.5 SP1 is a new release and people facing the similar kind of issue will help them resolving the installation issue.