If you have been unfortunate enough to run into this issue, here are a few things you can try to resolve it. These are for Windows 7 only – there are already solutions available for older versions of Windows if you search. You need a physical copy of the DVD to do a manual restore of the files.

1. (Re)start the Windows Installer service
   1. Right-click on Computer
   2. Click Manage
   3. Expand Services and Applications
   4. Select Services
   5. Scroll down to “Windows Installer”
   6. Right-click or double-click on it and make sure it is started and NOT disabled
2. Run “sfc /scannow” from a command prompt as Administrator
   1. Should see something like: windows resource protection found some corrupt files but was unable to fix them
      1. Check the log to see if the problem is a corrupt file such as “msi.dll”
         1. Do this by searching for “cannot repair”
      2. If that is the case you can restore this file from the Windows DVD by:
         1. Insert the Windows DVD in the drive, cancel the autorun if it pops up
         2. Open 7-zip and browse to “install.wim” in the DVD:\Sources folder (open it)
         3. Inside you will find numbered folders corresponding to the windows version, open yours:

            1=Home Basic

            2=Home Premium

            3=Professional

            4=Ultimate

         4. Browse to the folder for the version you have installed, and you can copy/extract the file(s) you need. In my case I needed “msi.dll” in the #\Windows\System32 folder
         5. Note that if you are restoring a sensitive file such as this that you have to take ownership of the original file to rename/remove it before you can restore this file from the DVD, and ideally set the restored file back to the original owner and permission.
         6. Also note that the “msi.dll” file is owned by “TrustedInstaller”, so if you are getting a security error you need to take ownership of the file to replace it and then restore TrustedInstaller as the owner. If you can’t find it when you “check” the name use “NT SERVICE\TrustedInstaller”
3. Restore an earlier restore point(not verified to work but try it..)
4. Run the repair option from the installer DVD
5. Reinstall Windows

Hope this helps someone. 🙂