IIS 7.5 Application Initialization 1 failed to install

I'm using Web Platform Installer to install "Application Initialization 1" but I get a general "Fatal error during installation" message.

In the log file I see:

MSI (s) (9C:24) [14:04:47:315]: Executing op: ActionStart(Name=ExecuteInstallWindowsHotfix,,)
1: IISCA IISExecuteCA : End CA Setup 
MSI (s) (9C:24) [14:04:47:315]: Executing op: CustomActionSchedule(Action=ExecuteInstallWindowsHotfix,
              \Users\GEORGE~1.VOV\AppData\Local\Temp\\HotfixPipeLine{3E0FEF42-B34C-40FE-8387-2EE0F22CE1A6}.msu^)
MSI (s) (9C:A4) [14:04:47:325]: Invoking remote custom action. D
         LL: C:\Windows\Installer\MSI5385.tmp, Entrypoint: ExecuteInstallWindowsHotfixCA
1: IISCA ExecuteInstallWindowsHotfixCA : Begin CA Setup 
1: IISCA ExecuteInstallWindowsHotfixCA : Launching process with command line C:\Windows\system32\wusa.exe 
        /quiet /norestart "C:\Users\GEORGE~1.VOV\AppData\Local\Temp\\HotfixPipeLine{3E0FEF42-B34C-40FE-8387-2EE0F22CE1A6}.msu" 
1: IISCA ExecuteInstallWindowsHotfixCA : Process returned with exit code -2145124329 
1: IISCA ExecuteInstallWindowsHotfixCA : Error in function InstallWindowsHotfixQuietly, hr=0x80070643 


1: IISCA ExecuteInstallWindowsHotfixCA : < !!ERROR!! >
                         Error installing hotfix '
                         C:\Users\GEORGE~1.VOV\AppData\Local\Temp\\HotfixPipeLine{3E0FEF42-B34C-40FE-8387-2EE0F22CE1A6}.msu', hr=0x80070643 


1: IISCA ExecuteInstallWindowsHotfixCA : Error in function ExecuteInstallWindowsHotfixCA, hr=0x80070643 
1: IISCA ExecuteInstallWindowsHotfixCA : End CA Setup 
   CustomAction ExecuteInstallWindowsHotfix returned actual error code 1603 
     (note this may not be 100% accurate if translation happened inside sandbox)

It looks like it's trying to install a hotfix.
I've having this problem on 4 different machines with Windows 7 Enterprize x64

Any idea how to fix this?

Update

I got the actual msu file from my "Temp" folder and I can see the hotfix it's trying to install.
it's a file called Windows6.1-KB2684600-v2-x64.msu
Support Link= http://support.microsoft.com?kbid=2684600

When I try to install this hotfix manually I get "The update is not applicable to your computer "

Update 2
I also asked on iis.net but they weren't able to help much

I got the same problem with my new laptop at work. I contacted Microsoft Support and after trying some different things they finally found out what was causing the installation of Application Initialization 1.0 module to fail on Windows 7 Enterprise SP1 x64 machine.

We found that hotfix 2684600 which needs to be installed for Application Initialization module, is supposed to update the iiscore.dll to version 7.5.7601.21943. However, our existing machine’s iiscore.dll is already at version 6.5.7601.23403, it would make sense that the hotfix is throwing the “not applicable for your computer” error during installation.

Digging further, we found that the version 23403 gets updated when KB 3125574 is installed through Windows Update.

We followed these steps to resolve the issue:

1. remove the KB 3125574
2. install Application Initialization module
3. then install the KB on top of it

Example of my the WebPI log:

1: IISCA IISExecuteCA : Begin CA Setup 
1: IISCA IISExecuteCA : CA 'IISExecuteCA' completed with return code hr=0x0 
MSI (s) (50:7C) [16:13:58:536]: Executing op: ActionStart(Name=ExecuteInstallWindowsHotfix,,)
1: IISCA IISExecuteCA : End CA Setup 
MSI (s) (50:7C) [16:13:58:537]: Executing op: CustomActionSchedule(Action=ExecuteInstallWindowsHotfix,ActionType=3073,Source=BinaryData,Target=ExecuteInstallWindowsHotfixCA,CustomActionData=94^C:\Users\HOLMBE~1\AppData\Local\Temp\\HotfixPipeLine{8AF6C421-008B-4C45-ACB4-232AC5559253}.msu^)
MSI (s) (50:A0) [16:13:58:543]: Invoking remote custom action. DLL: C:\WINDOWS\Installer\MSI1F6E.tmp, Entrypoint: ExecuteInstallWindowsHotfixCA
1: IISCA ExecuteInstallWindowsHotfixCA : Begin CA Setup 
1: IISCA ExecuteInstallWindowsHotfixCA : Launching process with command line C:\WINDOWS\system32\wusa.exe /quiet /norestart "C:\Users\HOLMBE~1\AppData\Local\Temp\\HotfixPipeLine{8AF6C421-008B-4C45-ACB4-232AC5559253}.msu" 
1: IISCA ExecuteInstallWindowsHotfixCA : Process returned with exit code -2145124329 
1: IISCA ExecuteInstallWindowsHotfixCA : Error in function InstallWindowsHotfixQuietly, hr=0x80070643 
1: IISCA ExecuteInstallWindowsHotfixCA : < !!ERROR!! > Error installing hotfix 'C:\Users\HOLMBE~1\AppData\Local\Temp\\HotfixPipeLine{8AF6C421-008B-4C45-ACB4-232AC5559253}.msu', hr=0x80070643 
1: IISCA ExecuteInstallWindowsHotfixCA : Error in function ExecuteInstallWindowsHotfixCA, hr=0x80070643 
1: IISCA ExecuteInstallWindowsHotfixCA : End CA Setup 
CustomAction ExecuteInstallWindowsHotfix returned actual error code 1603 (note this may not be 100% accurate if translation happened inside sandbox)