Win7 SP1 install always fails to code 8000ffff catastrophic failure, target state 7 (full logs available)

Win7 32bit SP1 always fails to critical failure without a reasonable errorcode, any tips what to do? other updates are ok.

I have tried standalone SP1, it fails after running a hour or so, here is LOG from todays try to run it.

sfc/scannow gives errors that its unable to fix, leaving a lot of pending renames.

I have executed MS system update readiness tool - it did not help

EVENT SYSTEM LOG

Changes to an update(Service Pack for Microsoft Windows (KB976932)) failed during Service Pack installation.
    Identity:     Package_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514
    Error Code:   0x8000ffff
    Target State: 7

Below is CBS.LOG file, the begin of 80mb file looks ok but the error is in the end of it;

2017-05-14 21:23:53, Info                  CBS    Appl: Package: Package_38_for_KB2773072~31bf3856ad364e35~x86~~6.1.1.5, Update: 2773072-113_neutral_GDR, Applicable: Applicable, Disposition: Installed
2017-05-14 21:23:53, Info                  CBS    Plan: Package: Package_38_for_KB2773072~31bf3856ad364e35~x86~~6.1.1.5, Update: 2773072-113_neutral_GDR, current: Staged, pending: Default, start: Installed, applicable: Installed, targeted: Installed, limit: Installed, selected: Default
2017-05-14 21:23:53, Info                  CBS    Perf: Resolve chain started.
2017-05-14 21:23:53, Info                  CSI    000001e8@2017/5/14:18:23:53.303 CSI Transaction @0x3f7828 initialized for deployment engine {d16d444c-56d8-11d5-882d-0080c847b195} with flags 00000002 and client id [80]"TI1.30592216_1341436901:2/Package_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514"

2017-05-14 21:23:53, Info                  CSI    000001e9@2017/5/14:18:23:53.303 CSI Transaction @0x3f7828 destroyed
2017-05-14 21:23:53, Info                  CBS    Perf: Resolve chain complete.
2017-05-14 21:23:53, Info                  CBS    Perf: Stage chain started.
2017-05-14 21:23:53, Info                  CBS    Exec: Express package staging finished without any missing file to download.
2017-05-14 21:23:53, Info                  CBS    Perf: Stage chain complete.
2017-05-14 21:23:53, Info                  CBS    Reboot mark refs: 0
2017-05-14 21:23:53, Info                  CBS    Enabling LKG boot option
2017-05-14 21:23:53, Info                  CBS    Restored system sleep block state: 0x80000000
2017-05-14 21:23:53, Info                  CBS    Exec: Processing complete.  Session: 30592216_1341436901, Package: Package_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514 [HRESULT = 0x00000000 - S_OK]
2017-05-14 21:23:55, Info                  CBS    Session: 30592216_1341436901 finalized. Reboot required: no [HRESULT = 0x00000000 - S_OK]
2017-05-14 21:23:56, Info                  CBS    Session: 30592223_1062534866 initialized by client SP Coordinater Engine.
2017-05-14 21:23:56, Error                 CBS    SPI: (CSPICbsClient::ChangeState:556)Failed changing package state to 7 hr=0x8000ffff
2017-05-14 21:23:56, Error                 CBS    SPI: (CSPCInstallTask::Execute:1010)Failed to install package with identity Package_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514 hr=0x8000ffff
2017-05-14 21:23:56, Info                  CBS    SPI: Reporting Failed package event
2017-05-14 21:23:56, Info                  CBS    Session: 30592223_1062534866 finalized. Reboot required: no [HRESULT = 0x00000000 - S_OK]
2017-05-14 21:27:37, Info                  CBS    SPI: Deleting directory: C:\023f738a14ef127fcc0f4d\5167834f29da6e33322f\e88a012d9ad4e32862.  ret=0
2017-05-14 21:27:37, Error                 CBS    SPI: (CSPInstall::Install:1583)Failed executing Install task hr=0x8000ffff
2017-05-14 21:27:37, Info                  CBS    SPI: Ending SP Installation
2017-05-14 21:27:37, Error                 CBS    SPI: (PerformSPInstallation:833)Failed to install SP using UI hr=0x8000ffff
2017-05-14 21:27:37, Error                 CBS    SPI: (wmain:1105)Failed to perform SP installation hr=0x8000ffff
2017-05-14 21:27:37, Info                  CBS    SPI: Reporting Failed event
2017-05-14 21:33:55, Info                  CBS    Reboot mark refs incremented to: 1
2017-05-14 21:33:55, Info                  CBS    Scavenge: Starts
2017-05-14 21:33:55, Info                  CSI    000001ea@2017/5/14:18:33:55.882 CSI Transaction @0x3f8168 initialized for deployment engine {d16d444c-56d8-11d5-882d-0080c847b195} with flags 00000002 and client id [10]"TI6.0_0:0/"

2017-05-14 21:33:55, Info                  CBS    Scavenge: Begin CSI Store
2017-05-14 21:33:56, Info                  CSI    000001eb Performing 1 operations; 1 are not lock/unlock and follow:
  Scavenge (8): flags: 00000017
2017-05-14 21:33:56, Info                  CSI    000001ec Store coherency cookie matches last scavenge cookie, skipping scavenge.
2017-05-14 21:33:56, Info                  CSI    000001ed ICSITransaction::Commit calling IStorePendingTransaction::Apply - coldpatching=FALSE applyflags=7
2017-05-14 21:33:56, Info                  CSI    000001ee Creating NT transaction (seq 2), objectname [6]"(null)"
2017-05-14 21:33:56, Info                  CSI    000001ef Created NT transaction (seq 2) result 0x00000000, handle @0xe08
2017-05-14 21:33:56, Info                  CSI    000001f0@2017/5/14:18:33:56.508 CSI perf trace:
CSIPERF:TXCOMMIT;161081
2017-05-14 21:33:56, Info                  CBS    Scavenge: Completed, disposition: 0X1
2017-05-14 21:33:56, Info                  CSI    000001f1@2017/5/14:18:33:56.508 CSI Transaction @0x3f8168 destroyed
2017-05-14 21:33:56, Info                  CBS    Reboot mark refs: 0
2017-05-14 21:33:56, Info                  CBS    Idle processing thread terminated normally
2017-05-14 21:33:56, Info                  CBS    Ending the TrustedInstaller main loop.
2017-05-14 21:33:56, Info                  CBS    Starting TrustedInstaller finalization.
2017-05-14 21:33:56, Info                  CBS    Ending TrustedInstaller finalization.

I also analyzed inf/setupapi.app.log it has errs;

!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbport.inf_x86_neutral_36dcabb60af69b68\usbuhci.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbport.inf_x86_neutral_36dcabb60af69b68\usbport.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usb.inf_x86_neutral_d30dae84172297e2\usbhub.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbport.inf_x86_neutral_36dcabb60af69b68\usbehci.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbport.inf_x86_neutral_36dcabb60af69b68\usbd.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbstor.inf_x86_neutral_9d88b35623781f49\USBSTOR.SYS'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\wvpchbus.inf_x86_neutral_4081b3954d367047\vpchbus.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\wvpchbus.inf_x86_neutral_4081b3954d367047\vpchbuspipe.dll'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\vpcusb.inf_x86_neutral_55a9e62c3e7d51a4\vpcusb.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\usbport.inf_x86_neutral_36dcabb60af69b68\usbohci.sys'
!!!  cpy: Error 160: One or more arguments are not correct.
!!!  cpy: Store copy Not NT5 signed 'C:\Windows\System32\DriverStore\FileRepository\sffdisk.inf_x86_neutral_130f79da61a126bb\sffp_sd.sys'
!!!  cpy: Error 160: One or more arguments are not correct.

Despite your plea for not recommending a clean windows install, I'm afraid we'll need to burst your bubble.

You're probably best off reinstalling Windows 7, and using an SP1 install.

This will ensure your computer is patched properly and cleanly, allowing for other Windows updates to install without issue, and allowing your 5 year old machine to hum a little more smoothly. Leaving your machine on an unpatched Windows 7 variant leaves you vulnerable to many of the exploits that have been fixed over the years as well.

Before wiping your machine, make sure you have access to your Windows 7 serial number so that you can easily reactivate your copy.