Hi I followed your process fully, which i knew before but followed it anyway, when i do the Software Updates Deployment Evaluation Cycle my WUAHandler.log shows no activity, yet i can deploy apps the this client all day long, not sure what else to check.
my setup
1 wsus server
1 SCCM sp2 server (added SWUP role etc)
can see the patches being downloaded but do now move to the chache folder on the client, andf this is not getting to me, any help would be a god send