Here are a couple of links that might help:
Troubleshooting Problems with MSDTC
Encountering problems with IIS install - Dev Shed
Here is a post in a thread on another forum. I came across it with Google.
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When you try to use the key updater utility, you keep getting the 0x80004005 error.
That error is very typical of a situation where the Key Updater Utility is not enjoying full two-way communication with MS servers. The Utility has the task of examining about 6,000 files and verifying their integrity, and if it finds correctable situations, it does make corrections by downloading new files from the MS servers. Usually the error is caused by some kind of third party program on your computer, such as a personal firewall, antimalware, or antivirus program, that is intefering with the Utility. Or, your internet connection could be utilizing a proxy server. And finally, there may be some kind of issue with your ISP itself.
The error can be frustrating since it reports that there is no internet access, yet you can get email and surf web pages! What it really means is that the specific MS program that is throwing the error cannot get full internet access.
Here are some general suggestions (the range of programs out there is way too big to give specifics):
1. If you are using a personal firewall program, make a special rule that allows the executable file for the Utility to have full internet access.
2. Some antivirus programs have rudimentary firewalls built in, and many have settings to block malicious scripts. Your AV program may have to be set to allow the updater utility to work.
3. Some antimalware programs (SpySweeper, SpyBot, Ad Aware, Spyware Doctor, etc) have settings to block malicious scripts. Your antimalware program may have to be set to allow the updater utility to work.
4. Check your Internet settings to see if a proxy server is enabled. Start>Control Panel>Internet Options>Connections>LAN Settings, Proxy Server. If you have proxy server settings, do not make any changes until you understand why they are set and how to put the settings back the way they were. Disabling proxy settings may cripple internet access for your entire computer.
5. If you are sure that all of the above is right but you still cannot get the Updater to work, may I suggest taking your computer to a friend's house to try their internet connection, assuming it is with a provider different from yours? We have had at least one forum poster who could only get the Updater to work by doing it this way, as there was something his ISP was doing that prevented proper communication.
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Hope something here helps.