Let me strat by saying that the server is 2008 r2. With SQL 2008 r2 running as the database. There are no firewalls and no proxy.
The windowsupdate.log shows the following:
2012-07-18 15:43:17:645 872 32c Agent ** START ** Agent: Finding updates [CallerId = AutomaticUpdates]
2012-07-18 15:43:17:645 872 32c Agent *********
2012-07-18 15:43:17:645 872 32c Agent * Online = Yes; Ignore download priority = No
2012-07-18 15:43:17:645 872 32c Agent * Criteria = "IsInstalled=0 and DeploymentAction='Installation' or IsPresent=1 and DeploymentAction='Uninstallation' or IsInstalled=1 and DeploymentAction='Installation' and RebootRequired=1
or IsInstalled=0 and DeploymentAction='Uninstallation' and RebootRequired=1"
2012-07-18 15:43:17:645 872 32c Agent * ServiceID = {3DA21691-E39D-4DA6-8A4B-B43877BCB1B7} Managed
2012-07-18 15:43:17:645 872 32c Agent * Search Scope = {Machine}
2012-07-18 15:43:17:645 872 32c Setup Checking for agent SelfUpdate
2012-07-18 15:43:17:646 872 32c Setup Client version: Core: 7.6.7600.256 Aux: 7.6.7600.256
2012-07-18 15:43:17:671 872 32c Misc Validating signature for C:\Windows\SoftwareDistribution\SelfUpdate\wuident.cab:
2012-07-18 15:43:17:676 872 32c Misc Microsoft signed: Yes
2012-07-18 15:43:17:676 872 32c Misc WARNING: Digital Signatures on file C:\Windows\SoftwareDistribution\SelfUpdate\wuident.cab are not trusted: Error 0x800b0001
2012-07-18 15:43:17:676 872 32c Setup WARNING: SelfUpdate check failed to download package information, error = 0x800B0001
2012-07-18 15:43:17:676 872 32c Setup FATAL: SelfUpdate check failed, err = 0x800B0001
2012-07-18 15:43:17:676 872 32c Agent * WARNING: Skipping scan, self-update check returned 0x800B0001
2012-07-18 15:43:17:677 872 32c Agent * WARNING: Exit code = 0x800B0001
2012-07-18 15:43:17:677 872 32c Agent *********
2012-07-18 15:43:17:677 872 32c Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdates]
2012-07-18 15:43:17:677 872 32c Agent *************
2012-07-18 15:43:17:677 872 32c Agent WARNING: WU client failed Searching for update with error 0x800b0001
2012-07-18 15:43:17:677 872 1b6c AU >>## RESUMED ## AU: Search for updates [CallId = {A1DA7921-A1C7-493E-A8BE-B53DBA888FD4}]
2012-07-18 15:43:17:677 872 1b6c AU # WARNING: Search callback failed, result = 0x800B0001
2012-07-18 15:43:17:677 872 1b6c AU # WARNING: Failed to find updates with error code 800B0001
2012-07-18 15:43:17:677 872 1b6c AU #########
2012-07-18 15:43:17:677 872 1b6c AU ## END ## AU: Search for updates [CallId = {A1DA7921-A1C7-493E-A8BE-B53DBA888FD4}]
2012-07-18 15:43:17:677 872 1b6c AU #############
2012-07-18 15:43:17:677 872 1b6c AU Successfully wrote event for AU health state:0
2012-07-18 15:43:17:677 872 1b6c AU AU setting next detection timeout to 2012-07-19 01:43:17
2012-07-18 15:43:17:678 872 32c Report REPORT EVENT: {277A6FA7-7CDA-430C-B3B5-138289F442ED} 2012-07-18 15:43:14:937-0500 1 148 101 {D67661EB-2423-451D-BF5D-13199E37DF28} 1 800b0001 SelfUpdate Failure Software
Synchronization Windows Update Client failed to detect with error 0x800b0001.
2012-07-18 15:43:17:678 872 32c Report REPORT EVENT: {EA91D79E-95CB-48FA-AE06-36BFAC4C5F00} 2012-07-18 15:43:16:419-0500 1 148 101 {D67661EB-2423-451D-BF5D-13199E37DF28} 1 800b0001 SelfUpdate Failure Software
Synchronization Windows Update Client failed to detect with error 0x800b0001.
2012-07-18 15:43:17:678 872 1b6c AU Successfully wrote event for AU health state:0
2012-07-18 15:43:17:678 872 32c Report REPORT EVENT: {561C4223-F5B7-46E5-AABE-C67D071EE86C} 2012-07-18 15:43:17:676-0500 1 148 101 {D67661EB-2423-451D-BF5D-13199E37DF28} 1 800b0001 SelfUpdate Failure Software
Synchronization Windows Update Client failed to detect with error 0x800b0001.
2012-07-18 15:43:17:678 872 1b6c AU Successfully wrote event for AU health state:0
2012-07-18 15:43:17:698 872 32c Report CWERReporter::HandleEvents - WER report upload completed with status 0x8
2012-07-18 15:43:17:698 872 32c Report WER Report sent: 7.6.7600.256 0x800b0001 D67661EB-2423-451D-BF5D-13199E37DF28 Scan 101 Managed
2012-07-18 15:43:17:705 872 32c Report CWERReporter::HandleEvents - WER report upload completed with status 0x8
2012-07-18 15:43:17:705 872 32c Report WER Report sent: 7.6.7600.256 0x800b0001 D67661EB-2423-451D-BF5D-13199E37DF28 Scan 101 Managed
2012-07-18 15:43:17:725 872 32c Report CWERReporter::HandleEvents - WER report upload completed with status 0x8
2012-07-18 15:43:17:725 872 32c Report WER Report sent: 7.6.7600.256 0x800b0001 D67661EB-2423-451D-BF5D-13199E37DF28 Scan 101 Managed
2012-07-18 15:43:17:726 872 32c Report CWERReporter finishing event handling. (00000000)
2012-07-18 15:43:22:646 872 32c Report CWERReporter finishing event handling. (00000000)
2012-07-18 15:52:50:217 872 32c Report Uploading 5 events using cached cookie, reporting URL =http://sa5db5003:8530/ReportingWebService/ReportingWebService.asmx
2012-07-18 15:52:52:882 872 32c Report Reporter successfully uploaded 5 events.
2012-07-18 16:04:54:362 5780 1c7c Misc =========== Logging initialized (build: 7.5.7601.17514, tz: -0500) ===========
2012-07-18 16:04:54:362 5780 1c7c Misc = Process: C:\Windows\SysWOW64\wusa.exe
2012-07-18 16:04:54:362 5780 1c7c Misc = Module: C:\Windows\SysWOW64\wuapi.dll
2012-07-18 16:04:54:351 5780 1c7c COMAPI ----------- COMAPI: IUpdateServiceManager::AddScanPackageService -----------
2012-07-18 16:04:54:362 5780 1c7c COMAPI - ServiceName = Windows Update Standalone Installer
2012-07-18 16:04:54:362 5780 1c7c COMAPI - ScanFileLocation = C:\f91d6a3da08b36f57974\wsusscan.cab
2012-07-18 16:04:54:409 872 1650 Misc Validating signature for C:\Windows\SoftwareDistribution\ScanFile\a7a18e8a-9621-429a-92cf-fc32d0d5be99\Source.cab:
2012-07-18 16:04:54:417 872 1650 Misc Microsoft signed: Yes
2012-07-18 16:04:54:511 872 1650 DtaStor Default service for AU is {9482F4B4-E343-43B6-B170-9A65BC822C77}
2012-07-18 16:04:54:533 5780 1c7c COMAPI - Added scan package service, ServiceID = {A7A18E8A-9621-429A-92CF-FC32D0D5BE99} Third party service
2012-07-18 16:04:54:536 5780 1c7c COMAPI -------------
2012-07-18 16:04:54:536 5780 1c7c COMAPI -- START -- COMAPI: Search [ClientId = wusa]
2012-07-18 16:04:54:536 5780 1c7c COMAPI ---------
2012-07-18 16:04:54:539 872 32c Agent *************
2012-07-18 16:04:54:540 872 32c Agent ** START ** Agent: Finding updates [CallerId = wusa]
2012-07-18 16:04:54:540 872 32c Agent *********
2012-07-18 16:04:54:540 872 32c Agent * Online = Yes; Ignore download priority = No
2012-07-18 16:04:54:540 872 32c Agent * Criteria = "DeploymentAction='Installation'"
2012-07-18 16:04:54:540 872 32c Agent * ServiceID = {A7A18E8A-9621-429A-92CF-FC32D0D5BE99} Third party service
2012-07-18 16:04:54:540 872 32c Agent * Search Scope = {Machine}
2012-07-18 16:04:54:552 5780 1c7c COMAPI <<-- SUBMITTED -- COMAPI: Search [ClientId = wusa]
2012-07-18 16:04:54:704 872 32c PT +++++++++++ PT: Synchronizing server updates +++++++++++
2012-07-18 16:04:54:705 872 32c PT + Offline serviceId = {A7A18E8A-9621-429A-92CF-FC32D0D5BE99}
2012-07-18 16:04:54:705 872 32c PT WARNING: Cached cookie has expired or new PID is available
2012-07-18 16:04:56:092 872 32c PT +++++++++++ PT: Synchronizing extended update info +++++++++++
2012-07-18 16:04:56:092 872 32c PT + Offline serviceId = {A7A18E8A-9621-429A-92CF-FC32D0D5BE99}
2012-07-18 16:04:56:178 872 32c Agent * Added update {E5D5670B-9279-4FD8-BC42-37E320A54631}.501 to search result
2012-07-18 16:04:56:178 872 32c Agent * Found 1 updates and 54 categories in search; evaluated appl. rules of 126 out of 284 deployed entities
2012-07-18 16:04:56:179 872 32c Agent *********
2012-07-18 16:04:56:179 872 32c Agent ** END ** Agent: Finding updates [CallerId = wusa]
2012-07-18 16:04:56:179 872 32c Agent *************
2012-07-18 16:04:56:181 5780 1f44 COMAPI >>-- RESUMED -- COMAPI: Search [ClientId = wusa]
2012-07-18 16:04:56:184 5780 1f44 COMAPI - Updates found = 1
2012-07-18 16:04:56:184 5780 1f44 COMAPI ---------
2012-07-18 16:04:56:184 5780 1f44 COMAPI -- END -- COMAPI: Search [ClientId = wusa]
2012-07-18 16:04:56:184 5780 1f44 COMAPI -------------
2012-07-18 16:04:59:530 5780 1c7c COMAPI ----------- COMAPI: IUpdateServiceManager::RemoveService -----------
2012-07-18 16:04:59:530 5780 1c7c COMAPI - ServiceId = {a7a18e8a-9621-429a-92cf-fc32d0d5be99}
2012-07-18 16:04:59:580 5780 1c7c COMAPI IUpdateService removing volatile scan package service, serviceID = {A7A18E8A-9621-429A-92CF-FC32D0D5BE99}
2012-07-18 16:04:59:581 872 1b84 Agent WARNING: WU client fails CClientCallRecorder::RemoveService with error 0x80248014
2012-07-18 16:04:59:597 5780 1c7c COMAPI WARNING: ISusInternal::RemoveService failed, hr=80248014