Currently, a couple of users are facing issues with Microsoft December 2014 patch day. Windows throw an error 800706F7 and refuse to update. The issue has been observed in Windows 7 clients and on Windows Server 2008 R2 as well (and probably on Exchange). A few hints, what to do.
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The main cause for update error 800706F7 is Update KB3004394 (just withdrawn from Microsoft's Windows Update – and also from direct download links). I've blogged about this yesterday in my article Update KB3004394 breaks Root Certificate in Windows 7/ Windows Server 2008 R2.
So the fix is really simple: Removal of Update KB3004394 should resolve the problem, that is occuring on Windows 7 client, and even on Windows Server 2008 R2 or Exchange Server (see this Technet thread – or this spiceworks.com thread).
KB3004395 is NOT installed on my system, but I still get above error and can't update. Please advise! I have run sfc/scannow, microsoft windows update fix, etc. to no avail.
Could it be a third party internet security suite, that blocks the update?
Also: Did you check Component store health with:
Dism /Online /Cleanup-Image /ScanHealth
(see my German article). Otherwise I have no further ideas.
Also did you tried:
wusa /uninstall /kb:3004394 /quiet /forcerestart
within an administrative console?