Try saving this in notepad as a command file, and run as administrator. Restart, and try once more to MANUALLY install the update.

Code:
:startclean
net stop wuauserv
net stop bits


RMDIR /S /Q "%Windir%\SoftwareDistribution\Download\"
MKDIR "%Windir%\SoftwareDistribution\Download\"


Dism.exe /online /Cleanup-Image /StartComponentCleanup /ResetBase


net start wuauserv
net start bits