WSUS Installation failures 0x800705b4

Hi,

I'm having a strange issue with a Windows 7 client, it's failing to install all available updates pushed using WSUS, however the log is confusing, firstly I get the following entry? (This is only 1 example but the same thing is happening to all updates)

2010-12-13    10:28:01:305    5496    17fc    Handler    Requesting post-reboot reporting for package Package_for_KB982132~31bf3856ad364e35~amd64~~6.1.1.3.
2010-12-13    10:28:01:305     124    165c    Shutdwn    InstallAtShutdown got install progress.
2010-12-13    10:28:01:305    5496    17fc    Handler    Completed install of CBS update with type=3, requiresReboot=1, installerError=0, hr=0x0
2010-12-13    10:28:01:305    5496    17fc    Handler    :::::::::
2010-12-13    10:28:01:305    5496    17fc    Handler    ::  END  ::  Handler: CBS Install
2010-12-13    10:28:01:305    5496    17fc    Handler    :::::::::::::
2010-12-13    10:28:01:305     124    165c    AU    >>##  RESUMED  ## AU: Installing update [UpdateId = {CB6D9EDD-1913-49FC-BBEA-BBD4DF03BC39}, succeeded]
2010-12-13    10:28:01:305     124    165c    Shutdwn    InstallAtShutdown got install progress.
2010-12-13    10:28:01:305     124    e94    Agent    *********
2010-12-13    10:28:01:305     124    165c    AU    Install call completed.
2010-12-13    10:28:01:305     124    e94    Agent    **  END  **  Agent: Installing updates [CallerId = AutomaticUpdates]
2010-12-13    10:28:01:305     124    165c    AU      # WARNING: Install call completed, reboot required = Yes, error = 0x00000000
2010-12-13    10:28:01:305     124    e94    Agent    *************

I'm assuming this tells me the update installed okay as it states "succeeded"

Then the system reboots and logs the following error.

2010-12-13    10:36:24:674     128    bdc    Report    REPORT EVENT: {11E18114-64D9-4ABB-9670-E99BDED36726}    2010-12-13 10:36:24:253-0000    1    198    101    {CB6D9EDD-1913-49FC-BBEA-BBD4DF03BC39}    102    800705b4    AutomaticUpdates    Failure    Content Install    Installation Failure: Windows failed to install the following update with error 0x800705b4: Security Update for Windows 7 for x64-based Systems (KB982132)

which now states it's failed with an 0x800705b4 error, it makes no sense.

Anyone else seen this or know why it's behaving in this manner? The client laptop is unable to install any updates.

Thanks,

JW