WSUS post installation failed with error Request for principal permission failed.

2015-07-04 14:17:53  Postinstall started
2015-07-04 14:17:53  Detected role services: Api, Database, UI, Services
2015-07-04 14:17:53  Start: LoadSettingsFromParameters
2015-07-04 14:17:53  Content local is: True
2015-07-04 14:17:53  Content directory is: E:\Sources\wsus
2015-07-04 14:17:53  SQL instname is: p01
2015-07-04 14:17:53  End: LoadSettingsFromParameters
2015-07-04 14:17:53  Start: Run
2015-07-04 14:17:53  Fetching WsusAdministratorsSid from registry store
2015-07-04 14:17:53  Value is S-1-5-21-4005366517-1302196345-1970331482-1013
2015-07-04 14:17:53  Fetching WsusReportersSid from registry store
2015-07-04 14:17:53  Value is S-1-5-21-4005366517-1302196345-1970331482-1014
2015-07-04 14:17:53  Configuring content directory...
2015-07-04 14:17:53  Configuring groups...
2015-07-04 14:17:53  Starting group configuration for WSUS Administrators...
2015-07-04 14:17:53  Found group in regsitry, attempting to use it...
2015-07-04 14:17:55  Writing group to registry...
2015-07-04 14:17:55  Finished group creation
2015-07-04 14:17:55  Starting group configuration for WSUS Reporters...
2015-07-04 14:17:55  Found group in regsitry, attempting to use it...
2015-07-04 14:17:55  Writing group to registry...
2015-07-04 14:17:55  Finished group creation
2015-07-04 14:17:55  Configuring permissions...
2015-07-04 14:17:55  Fetching content directory...
2015-07-04 14:17:55  Fetching ContentDir from registry store
2015-07-04 14:17:55  Value is E:\Sources\wsus
2015-07-04 14:17:55  Fetching group SIDs...
2015-07-04 14:17:55  Fetching WsusAdministratorsSid from registry store
2015-07-04 14:17:55  Value is S-1-5-21-4005366517-1302196345-1970331482-1013
2015-07-04 14:17:55  Fetching WsusReportersSid from registry store
2015-07-04 14:17:55  Value is S-1-5-21-4005366517-1302196345-1970331482-1014
2015-07-04 14:17:55  Creating group principals...
2015-07-04 14:17:55  Granting directory permissions...
2015-07-04 14:17:55  Granting permissions on content directory...
2015-07-04 14:17:55  Granting registry permissions...
2015-07-04 14:17:55  Granting registry permissions...
2015-07-04 14:17:55  Granting registry permissions...
2015-07-04 14:17:55  Configuring shares...
2015-07-04 14:17:55  Configuring network shares...
2015-07-04 14:17:55  Fetching content directory...
2015-07-04 14:17:55  Fetching ContentDir from registry store
2015-07-04 14:17:55  Value is E:\Sources\wsus
2015-07-04 14:17:55  Fetching WSUS admin SID...
2015-07-04 14:17:55  Fetching WsusAdministratorsSid from registry store
2015-07-04 14:17:55  Value is S-1-5-21-4005366517-1302196345-1970331482-1013
2015-07-04 14:17:55  Content directory is local, creating content shares...
2015-07-04 14:17:55  Creating share "UpdateServicesPackages" with path "E:\Sources\wsus\UpdateServicesPackages" and description "A network share to be used by client systems for collecting all software packages (usually applications) published on this WSUS system."
2015-07-04 14:17:55  Deleting existing share...
2015-07-04 14:17:55  Creating share...
2015-07-04 14:17:55  Share successfully created
2015-07-04 14:17:55  Creating share "WsusContent" with path "E:\Sources\wsus\WsusContent" and description "A network share to be used by Local Publishing to place published content on this WSUS system."
2015-07-04 14:17:55  Deleting existing share...
2015-07-04 14:17:55  Creating share...
2015-07-04 14:17:56  Share successfully created
2015-07-04 14:17:56  Creating share "WSUSTemp" with path "C:\Program Files\Update Services\LogFiles\WSUSTemp" and description "A network share used by Local Publishing from a Remote WSUS Console Instance."
2015-07-04 14:17:56  Deleting existing share...
2015-07-04 14:17:56  Creating share...
2015-07-04 14:17:56  Share successfully created
2015-07-04 14:17:56  Finished creating content shares
2015-07-04 14:17:56  Stopping service WSUSService
2015-07-04 14:17:56  Stopping service W3SVC
2015-07-04 14:17:57  Configuring database...
2015-07-04 14:17:57  Configuring the database...
2015-07-04 14:17:57  Establishing DB connection...
2015-07-04 14:17:57  Checking to see if database exists...
2015-07-04 14:17:57  Database exists
2015-07-04 14:17:57  Switching database to single user mode...
2015-07-04 14:18:00  Loading install type query...
2015-07-04 14:18:00  DECLARE @currentDBVersion       int
DECLARE @scriptMajorVersion     int = (9600)
DECLARE @scriptMinorVersion     int = (16384)
DECLARE @databaseMajorVersion   int 
DECLARE @databaseMinorVersion   int 
DECLARE @databaseBuildNumber    nvarchar(10)
IF NOT EXISTS(SELECT * FROM sys.databases WHERE name='SUSDB')
BEGIN
    SELECT 1
END
ELSE
BEGIN
    SET @currentDBVersion = (SELECT SchemaVersion FROM SUSDB.dbo.tbSchemaVersion WHERE ComponentName = 'CoreDB')
    SET @databaseBuildNumber = (SELECT BuildNumber FROM SUSDB.dbo.tbSchemaVersion WHERE ComponentName = 'CoreDB')
    DECLARE @delimiterPosition INT = CHARINDEX('.', @databaseBuildNumber)
    IF (@delimiterPosition = 0)
    BEGIN
        RAISERROR('Invalid schema version number', 16, 1) with nowait
        return 
    END 
    SET @databaseMajorVersion = SUBSTRING(@databaseBuildNumber, 1, @delimiterPosition - 1)
    SET @databaseMinorVersion = SUBSTRING(@databaseBuildNumber, (@delimiterPosition + 1), (10 - @delimiterPosition))
    IF @currentDBVersion < 926
    BEGIN
        SELECT 3
    END
    ELSE
    BEGIN
        IF (@scriptMajorVersion > @databaseMajorVersion OR
           (@scriptMajorVersion = @databaseMajorVersion AND @scriptMinorVersion > @databaseMinorVersion))
        BEGIN
            SELECT 2
        END
        ELSE IF (@scriptMajorVersion = @databaseMajorVersion AND
                 @scriptMinorVersion = @databaseMinorVersion)
        BEGIN
            SELECT 0
        END
        ELSE
        BEGIN
            SELECT 4
        END
    END
END

2015-07-04 14:18:00  Install type is: Reinstall
2015-07-04 14:18:00  Creating logins...
2015-07-04 14:18:00  Fetching account info for S-1-5-20
2015-07-04 14:18:00  Found principal
2015-07-04 14:18:00  Found account
2015-07-04 14:18:00  Got binary SID
2015-07-04 14:18:00  Fetching WsusAdministratorsSid from registry store
2015-07-04 14:18:00  Value is S-1-5-21-4005366517-1302196345-1970331482-1013
2015-07-04 14:18:00  Fetching account info for S-1-5-21-4005366517-1302196345-1970331482-1013
2015-07-04 14:18:00  Found principal
2015-07-04 14:18:00  Found account
2015-07-04 14:18:00  Got binary SID
2015-07-04 14:18:00  Setting content location...
2015-07-04 14:18:00  Fetching ContentDir from registry store
2015-07-04 14:18:00  Value is E:\Sources\wsus
2015-07-04 14:18:00  Swtching DB to multi-user mode......
2015-07-04 14:18:00  Finished setting multi-user mode
2015-07-04 14:18:00  Writing DB settings to registry...
2015-07-04 14:18:00  Marking PostInstall done for UpdateServices-Database in the registry...
2015-07-04 14:18:00  Starting service W3SVC
2015-07-04 14:18:00  Configuring IIS...
2015-07-04 14:18:00  Start: ConfigureWebsite
2015-07-04 14:18:01  Configuring website on port 8530
2015-07-04 14:18:59  2015-07-04 14:18:12  Info      IISCustomAction    Performing Setup Action, Command /Install 
2015-07-04 14:18:56  Info      IISCustomAction    Command /Install Succeeded

2015-07-04 14:18:59  End: ConfigureWebsite
2015-07-04 14:18:59  Configuring performance counters...
2015-07-04 14:18:59  Configuring Stats.NET perf counter...
2015-07-04 14:18:59  Configuring reporting perf counter...
2015-07-04 14:18:59  Configuring client webservice perf counter...
2015-07-04 14:18:59  Configuring server sync webservice perf counter...
2015-07-04 14:18:59  Configuring API remoting perf counter...
2015-07-04 14:18:59  Bringing services online...
2015-07-04 14:18:59  Checking initialization status... 
2015-07-04 14:18:59  Database needs initialization.
2015-07-04 14:18:59  StartServer starting...
2015-07-04 14:18:59  Generating encryption key to write to the registry...
2015-07-04 14:18:59  Generating encryption key to write to the database...
2015-07-04 14:18:59  Generating encryption key succeeded...
2015-07-04 14:18:59  Setting WSUSService to autostart...
2015-07-04 14:18:59  WSUSService is set to autostart.
2015-07-04 14:18:59  Starting WSUSService...
2015-07-04 14:18:59  WSUSService is now started.
2015-07-04 14:18:59  Importing default detectoids.
2015-07-04 14:18:59  Importing CriticalUpdates.xml...
2015-07-04 14:19:00  Importing Drivers.xml...
2015-07-04 14:19:00  Importing FeaturePacks.xml...
2015-07-04 14:19:00  Importing MicrosoftCorporation.xml...
2015-07-04 14:19:00  Importing SecurityUpdates.xml...
2015-07-04 14:19:00  Importing ServicePacks.xml...
2015-07-04 14:19:00  Importing Tools.xml...
2015-07-04 14:19:00  Importing UpdateRollups.xml...
2015-07-04 14:19:00  Importing Updates.xml...
2015-07-04 14:19:00  Importing Windows.xml...
2015-07-04 14:19:00  Importing Windows2000family.xml...
2015-07-04 14:19:00  Importing WindowsServer2003DatacenterEdition.xml...
2015-07-04 14:19:00  Importing WindowsServer2003Family.xml...
2015-07-04 14:19:00  Importing WindowsXPfamily.xml...
2015-07-04 14:19:00  Importing LocalPublisher.xml...
2015-07-04 14:19:00  Importing LocallyPublishedPackages.xml...
2015-07-04 14:19:00  Importing Applications.xml...
2015-07-04 14:19:00  Importing Exchange.xml...
2015-07-04 14:19:00  Importing Office.xml...
2015-07-04 14:19:00  Importing SQL.xml...
2015-07-04 14:19:00  Importing Exchange2000Server.xml...
2015-07-04 14:19:00  Importing ExchangeServer2003.xml...
2015-07-04 14:19:00  Importing OfficeXP.xml...
2015-07-04 14:19:00  Importing Office2003.xml...
2015-07-04 14:19:00  Importing SQLServer.xml...
2015-07-04 14:19:00  Importing WindowsXP64BitEditionVersion2003.xml...
2015-07-04 14:19:01  Importing DefinitionUpdateSusXml.xml...
2015-07-04 14:19:01  Importing ClientServicingApiDetectoid.xml...
2015-07-04 14:19:01  Importing default detectoids succeeded.
2015-07-04 14:19:01  Creating default subscription.
2015-07-04 14:19:01  Instantiating UpdateServer
2015-07-04 14:19:03  CreateDefaultSubscription failed. Exception: System.Security.SecurityException: Request for principal permission failed.
   at Microsoft.UpdateServices.Internal.BaseApi.SoapExceptionProcessor.DeserializeAndThrow(SoapException soapException)
   at Microsoft.UpdateServices.Internal.DatabaseAccess.AdminDataAccessProxy.GetServerVersion()
   at Microsoft.UpdateServices.Internal.BaseApi.UpdateServer.CreateUpdateServer(String serverName, Boolean useSecureConnection, Int32 portNumber)
   at Microsoft.UpdateServices.Internal.BaseApi.UpdateServer..ctor(Boolean bypassApiRemoting)
   at Microsoft.UpdateServices.Setup.StartServer.StartServer.CreateDefaultSubscription()
The Zone of the assembly that failed was:
MyComputer
2015-07-04 14:19:03  StartServer encountered errors. Exception=Request for principal permission failed.
2015-07-04 14:19:03  Microsoft.UpdateServices.Administration.CommandException: Failed to start and configure the WSUS service
   at Microsoft.UpdateServices.Administration.PostInstall.Run()
   at Microsoft.UpdateServices.Administration.PostInstall.Execute(String[] arguments)

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Pralhad