I found a solution to this problem. It was a software problem, not
hardware and nothing to do with what was actually being installed. I
was able to solve the problem because I noticed some other symptoms:
I could not run Regedit.exe or Regedt32.exe (there was a message about
adding to the registry instead).
If I right-clicked My Computer ands selected Properties then nothing
happened (the System Properties Window did not open).
I found the solution to this last symptom here and this cured all my
'JSI Tip 5425. My Computer Properties does NOT invoke the dialog box
and other strange behavior?' (http://tinyurl.com/9r6lju
In my case there was an extra " at the end of the exefile= response but
correcting the registry entry fixed all the problems including the
Windows Installer SDK error message.