WSUS not working. Driving me crazy! :)

this is really bogging my mind. I created a wsus server a few months ago and it was working fine but now all of a sudden it doesn't work. The only event errors i am getting is that the WSUS drive to were the updates download to is full. I assume it's full because the updates that are support to get installed are just sitting there waiting to get installed.

I also have auto approvals setup. 

Here are my settings

Computer Configuration (Enabled)hide
Policieshide
Administrative Templateshide
Policy definitions (ADMX files) retrieved from the local machine.System/Logonhide
Policy Setting Comment 
Always wait for the network at computer startup and logon Enabled  

System/Power Management/Hard Disk Settingshide
Policy Setting Comment 
Turn Off the Hard Disk (Plugged In) Enabled  
Turn Off the Hard Disk (seconds): 0 
 

Windows Components/Windows Updatehide
Policy Setting Comment 
Allow Automatic Updates immediate installation Enabled  
Allow non-administrators to receive update notifications Disabled  
Automatic Updates detection frequency Enabled  
Check for updates at the following 
interval (hours):  22 
 
Policy Setting Comment 
Configure Automatic Updates Enabled Updates are auto downloaded to PC, but not installed. 
Configure automatic updating: 4 - Auto download and schedule the install 
The following settings are only required 
and applicable if 4 is selected. 
Scheduled install day:  4 - Every Wednesday 
Scheduled install time: 03:00 
 
Policy Setting Comment 
Delay Restart for scheduled installations Enabled  
Wait the following period before 
proceeding with a scheduled 
restart (minutes):  5 
 
Policy Setting Comment 
Do not adjust default option to 'Install Updates and Shut Down' in Shut Down Windows dialog box Enabled If you enable this policy setting, the user's last shut down choice (Hibernate, Restart, etc.) is the default option in the Shut Down Windows dialog box 
Do not display 'Install Updates and Shut Down' option in Shut Down Windows dialog box Disabled  
Enable client-side targeting Enabled  
Target group name for this computer Production Group 
 
Policy Setting Comment 
Enabling Windows Update Power Management to automatically wake up the system to install scheduled updates Enabled  
No auto-restart with logged on users for scheduled automatic updates installations Disabled Computer is set to auto restart after updates 
Re-prompt for restart with scheduled installations Enabled  
Wait the following period before 
prompting again with a scheduled 
restart (minutes):  10 
 
Policy Setting Comment 
Reschedule Automatic Updates scheduled installations Enabled If a computer misses an install it will wait 30 mins to install the missed updates 
Wait after system 
startup (minutes):  30 
 
Policy Setting Comment 
Specify intranet Microsoft update service location Enabled  
Set the intranet update service for detecting updates: http://ny-wsus 
Set the intranet statistics server: http://ny-wsus 
(example: http://IntranetUpd01) 
 

If anyone can help me it would be great!

Thanks