I could only resolve this by getting a new computer. Its cheaper than having me idle for days/weeks/months while MSFT gets around to fixing the bug, providing no workaround. If this is blocking your work, you should strongly consider doing it right away instead of waiting for a resolution.

I did try to just update to windows 10 using the same laptop, but the Win 10 image from the MSDN subscriber website left me with permanently flickering icons and a burned up CPU. YMMV

Solution for me:

fsutil resource setautoreset true c:\

C:\WINDOWS\system32>cd %SystemRoot%\System32\SMI\Store\Machine

C:\WINDOWS\System32\SMI\Store\Machine>attrib -s -h *

C:\WINDOWS\System32\SMI\Store\Machine>del *.blf

C:\WINDOWS\System32\SMI\Store\Machine>del *.regtrans-ms

C:\WINDOWS\system32\SMI\Store\Machine>cd %SystemRoot%\System32\config\TxR

C:\WINDOWS\System32\config\TxR>attrib -s -h *

C:\WINDOWS\System32\config\TxR>del /q *

The last command says some files could not be deleted, because they are in use. I ignored this message. After a reboot I was able to complete the VS 2017 (15.3.3) installation.

Source: https://social.technet.microsoft.com/Forums/windows/en-US/b2727a81-badc-4ad3-a9e2-336dc1bcaab1/windows-update-error-0x80070bc9-with-windows-7?forum=w7itprogeneral

This problem report was changed to "Closed-Fixed" in error. Only a portion of this issue has been fixed in 15.4. The remaining fix is scheduled for 15.5. We apologize for any inconvenience.

This issue has been fixed and is now available in our latest update. You can download the update via the in-product notification or from here: https://www.visualstudio.com/vs/ Thanks to everyone who provided feedback, votes and solutions for this problem.

I have not attempted this solution personally, but another member of my team had the same issue, and supposedly was able to fix it by getting full administrative access for their account on their computer. I'll have to go through the process to get approvals and get this status on my account.

Paul, thanks for reporting the issue. The setup log indicates issue within Windows Update system (DISM tool):

Command executed: "C:\Windows\system32\dism.exe" /online /quiet /norestart /add-package /packagepath:"412fbbdf-7716-4d8f-a313-30eae31e1179\Windows6.1-KB2533623-x64.cab" /logPath:"dd_setup_20170816120526_002_WindowsUpdates.KB2533623.log"

Return code: 14081

Return code details: The referenced assembly could not be found.

For fixing this, please use this resource: https://support.microsoft.com/en-us/help/10164/fix-windows-update-errors

You can also try to install KB2758857 from https://www.microsoft.com/en-us/download/details.aspx?id=35903, which is a newer version of the required update KB2533623.

Please, let us know if you were able to resolve the problem.