Windows/Microsoft Update wont install?

My desktop has recently started to fail on installations from MS/Windows update. This also includes installing a downloaded and saved copy of IE7. I can still install other software. The PC is a workstation in a domain and I have set in Group Policy to auto update and it fails. When i manually update (as an Admin) it hangs at the "Initializing Installation" for a couple minutes then reports that the installation was unsuccessful and requests a reboot to complete the install but nothing happens. I dont know where to go from here short of a windows repair or reinstall. No new software installed however I did remove it from a domain and rejoined it but I dont think that should have any impact on updates? Any ideas would be appreciated.

 

Download and try running Dial-A-Fix and select the Windows Update repair.

 

Direct link to Dial-A-Fix:

http://208.101.7.150/download.php?det=4899

 

I tried the Dial-a-fix and ran them all with no luck. It cleared my update history but now it wont install the "Windows Installer" updates (fails as all other updates have). I even tried a "Windows Repair" with no success. The odd thing is that after the repair all SP's and updates still remained which I have not seen happen in the past. Still searching for the problem.