Build & Capture Task Sequence skips Install Software Updates step

Having an issue where during a build & capture TS where the Install Software Updates step seems to get passed over. Viewing the Event Manager show that the step gets initiated then immediately reports back with an 11134 message ID (Successfully completed the action...). Digging deeper in the Event Manage shows this:

The task sequence execution engine successfully completed the action (Install Software Updates) in the group (Apply Windows Updates) with exit code 0

Action output: nstance of CCM_PolicyAgent_SettingsEvaluationComplete

{

ClientID = "GUID:77307778-A5D5-4F3E-BA22-AEA0C742F235";

DateTime = "20111110183401.656000+000";

PolicyNamespace = "\\\\bcadskjp\\root\\ccm\\policy\\machine\\actualconfig";

ProcessID = 2584;ThreadID = 2588;

};

Successfully submitted event to the Status Agent.

End TS policy evaluation

Policy evaluation initiated

Waiting for policy to be compiled in 'root\ccm\policy\machine' namespace

Policy verification done

GetIPriviledgedInstallInterface successful

Refreshing Updates

Successfully initiated RefreshUpdates operation

RefreshUpdates operation has already completed

GetIPriviledgedInstallInterface successful

Installing all updates targetted for this computer

InstallSWUpdates(spInstall, spCIAgentCallback, tType, ulCookie, &jobID), HRESULT=80040708 (e:\nts_sms_fre\sms\client\osdeployment\installswupdate\installswupdate.cpp,1004)

No updates need to be installed on this machine.

Setting TSEnv variable SMSTSInstallUpdateJobGUID=.

The "No updates need to be installed..." message is completely off, as there are dozens of post-Windows 7 SP1 updates available. These updates appear to have no problem being advertised to client machines and will install successfully when run.

The Install ConfigMgr step parameters are set to: FSP=SMS.HDCCO.COM SMSMP=SMS.HDCCO.COM SMSSLP=SMS.HDCCO.COM PATCH="%_SMSTSMDataPath%\OSD\HDC00066\i386\hotfix\KB2509007\sccm2007ac-sp2-kb2509007-x86-enu.msp"

The FSP, SMSMP, and SMSSLP haven't changed recently, the patch is in place to address the high volume of updates that are usually available to install during a build & capture.

So now I'm left wondering why this process is not working now after running dozens of build & captures over the past couple of years. Any advice would be greatly appreciated.

Thanks

- Robert

smsts.log

smsts-20111110-103106.log