I was trying to install Windows 7 Sp1 on a laptop and I was getting an “ACCESS DENIED” error with no further errors. After a bit of tshooting I ended up running processmon and it turned out there was a DENY set on the C drive for USERS, that means when the service pack was attempting to install it would not be able to create the C:\32893928109093829312\ folder.. that’s one of the first steps.

I removed the DENY permission and everything worked well.

process mon is a great tool, Good luck