BITS 2.0 Install Fails - Permission problem

Hi,

Everytime I attempt to install KB842773 (BITS 2.0) update, I get the error
that it fails and the error code 0x8007F004.

SP2 also fails with a similar code (F004) and states that I don't have
permission to update the computer.

I've used Windows update sucessfully in the past and my domain account is in
the local administrators group. Even the local administrator account logged
on locally fails.

Is my domain admin responsible, he claims he's not? Is is some sort of
policy issue? I can't find any reference to the 8007F004 error.

Thanks