wsus on W2K8 R2 fails

Hi All

I am busy re-installing SCCM but the WSUS installation keeps on failing

tried to download wsus and install manually - also tried to add the wsus role through role services

It fails with the following error

Unable to create log file C:\inetpub\logs\LogFiles\W3SVC1\u_ex121008.log. Make sure that the logging directory is correct and this computer has write access to that directory.

I have tried to do the following as another post suggests in

c:\windows\system32 lodctr /R

This had no effect at all

thx Mike