Windows 7 SP1 x64 fails with fatal error c0000034 when installed via WSUS

UPDATE: If you have the above error message right now, MS have posted a fix which should get you back up and running. This will not help if you've already carried out the pending.xml edit ot the SetupExecute registry edit to get around the problem and are stuck in a 'torn' state where your system will not complete the update to SP1.

Blogging about this one to keep track of what I've done/am doing to troubleshoot it. I'll try to write it up if I ever get a solution in case it's useful to others.
The Problem:

Having tested the install of SP1 manually on 3 machines, decided that it seemed stable and so decided to roll it out across the organisation (approx 30 desktops and 6 laptops) via WSUS. Upon restarting following the install, nearly all of the machines froze on a black screen with a fatal error C0000034 error message.

Troublehsooting:

Inital (sllightly) panicked Googling turned up a couple of suggestions, mainly on this thread over at TechNet forums.

Andre.Ziegler suggested running DISM /image:C:\ /cleanup-image /revertpendingactions from the Windows Recovery Environment but that failed with Error 2.

Suggestions to restore using a recovery point were useless as it would appear that installing SP1 deletes all recovery points. This occurs even when installing SP1 manually without any (obvious) error messages.

Renaming/deleting the pending.xml file from winsxs doesn't help as the system get's stuck on the starting Windows screen.

Thiswoot suggests editing the pending.xml file to remove all references to _0000000000000000.cdf-ms. This works, however many are warning against this as a resolution method as it could leave one's machine "in an even worse state". How this state could be worse though I'm still not sure, especially as it would appear that some people are being advised to completely rebuild their machines or setup a dual boot to 'resolve' the issue.

Despite getting the machine back up and running, it would still appear that SP1 didn't install correctly. Although SP1 is listed in the System Properties, there is no way of uninstalling it via the Control Panel. In fact, it would appear that all of the updates contained within SP1 are listed seperately with an install date that matches the SP1 failed install.

A prefered method as reproduced here gives two options. Option 1 is a no go as it requires System Restore Points. Option 2 works just as well as the pending.xml edit and produces the same result i.e. SP1 has a part install.
The SetupExecute method originally posted here has been superceded. However, that's another method that I used in my original troubleshooting process.

With either of these fixes we end up with a computer which has a part install of SP1 which cannot be uninstalled via Control Panel (I am yet to try the Command Prompt method) and cannot have a full install applied over the top as it fails with the 0x800f0a13 error. Note: Driver Sweeper has never been run on any of the affected machines. The article also mentions DriverCleanerDotNet and, unless this is some part of WDS or MDT, that hasn't touched the machines either.

Next Planned Troubleshooting Steps:

Attempt to resolve the 0x800f0a13.
 - Have already taken some steps towards this. Extracting the relevant folders from the install.wim to windows\winsxs doesn't work and requires taking ownership/changing permissions on the winsxs folder. Next plan is to try the suggested fix in the comment by ManfredS dated Fri, Mar 11 2011 7:15 AM.

Try a Command Prompt uninstall of SP1.
 - Don't hold out much hope for this one.

Wait for someone else/MS to come up with a solution.
 - Seems to be a lot of activity on the problem so fingers crossed here.

That's it for now. More updates to follow