WSUS on SCCM server 2012 R2 not completing post install

For the life of us we cannot install WSUS on our SCCM 2012 R2 server.

We tried the \wsusutil.exe postinstall SQL_INSTANCE_NAME="ABC\SUSDB" CONTENT_DIR=X:\WSUS

We keep getting this error message below, and the highlighted part is the problem.

The account we are using has access to 'local admin' rights of the SCCM box. Also access to SQL

We have the proper permissions on the folder, adding also Network Service, etc.

We cannot get WSUS up and running and keep hitting a wall.   It will not create WSUS website

Any suggestions would help.

014-01-31 22:49:42  Setting content location...
 2014-01-31 22:49:42  Fetching ContentDir from registry store
 2014-01-31 22:49:42  Value is W:\WSUS
 2014-01-31 22:49:42  Swtching DB to multi-user mode......
 2014-01-31 22:49:42  Finished setting multi-user mode
 2014-01-31 22:49:42  Writing DB settings to registry...
 2014-01-31 22:49:42  Marking PostInstall done for UpdateServices-WidDatabase in the registry...
 2014-01-31 22:49:42  Starting service W3SVC
 2014-01-31 22:49:43  Configuring IIS...
 2014-01-31 22:49:43  Start: ConfigureWebsite
 2014-01-31 22:49:43  Configuring website on port 8530
 2014-01-31 22:49:43  System.ComponentModel.Win32Exception (0x80004005): The system cannot find the file specified
    at System.Diagnostics.Process.StartWithShellExecuteEx(ProcessStartInfo startInfo)
    at System.Diagnostics.Process.Start(ProcessStartInfo startInfo)
    at Microsoft.UpdateServices.Administration.UseCustomWebSite.ExecuteIisCustomAction(String arguments)
    at Microsoft.UpdateServices.Administration.UseCustomWebSite.Install(Int32 portNumber)
    at Microsoft.UpdateServices.Administration.UseCustomWebSite.InstallAndConfigure(IisConfiguration& iisConfiguration, Int32 newPortNumber)
    at Microsoft.UpdateServices.Administration.PostInstall.ConfigureWebsite(Int32 portNumber)
    at Microsoft.UpdateServices.Administration.PostInstall.Run()
    at Microsoft.UpdateServices.Administration.PostInstall.Execute(String[] arguments)
LVL 1
mrwildeAsked:
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Nagendra Pratap SinghDesktop Applications SpecialistCommented:
I can see that you are having this issue from Feb 2014.

Please download WSUS30-KB972455-x64.exe from http://www.microsoft.com/en-in/download/details.aspx?id=5216 and run it manually.

Instead of the WID, use an actual SQL DB. It should install or at least give another error.
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DonNetwork AdministratorCommented:
First off Server 2012 uses WSUS 4.0 (WSUS 3.0 sp2 is not supported), secondly you need to install WSUS using the Add roles wizard.

https://mizitechinfo.wordpress.com/2013/08/19/step-by-step-installing-configuring-wsus-in-server-2012-r2/
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mrwildeAuthor Commented:
So sorry realised I pasted the wrong log report.
this is the most recent

2015-01-10 01:38:38  Fetching account info for S-1-5-21-294407246-1970160363-1177281898-1014
2015-01-10 01:38:38  Found principal
2015-01-10 01:38:38  Found account
2015-01-10 01:38:38  Got binary SID
2015-01-10 01:38:38  Setting content location...
2015-01-10 01:38:38  Fetching ContentDir from registry store
2015-01-10 01:38:38  Value is E:\WSUS UPDATES
2015-01-10 01:38:38  Swtching DB to multi-user mode......
2015-01-10 01:38:38  Finished setting multi-user mode
2015-01-10 01:38:38  Writing DB settings to registry...
2015-01-10 01:38:38  Marking PostInstall done for UpdateServices-Database in the registry...
2015-01-10 01:38:38  Starting service W3SVC
2015-01-10 01:38:39  Configuring IIS...
2015-01-10 01:38:39  Start: ConfigureWebsite
2015-01-10 01:38:39  Configuring website on port 8530
2015-01-10 01:38:41  System.ComponentModel.Win32Exception (0x80004005): The system cannot find the file specified
   at System.Diagnostics.Process.StartWithShellExecuteEx(ProcessStartInfo startInfo)
   at System.Diagnostics.Process.Start(ProcessStartInfo startInfo)
   at Microsoft.UpdateServices.Administration.UseCustomWebSite.ExecuteIisCustomAction(String arguments)
   at Microsoft.UpdateServices.Administration.UseCustomWebSite.Install(Int32 portNumber)
   at Microsoft.UpdateServices.Administration.UseCustomWebSite.InstallAndConfigure(IisConfiguration& iisConfiguration, Int32 newPortNumber)
   at Microsoft.UpdateServices.Administration.PostInstall.ConfigureWebsite(Int32 portNumber)
   at Microsoft.UpdateServices.Administration.PostInstall.Run()
   at Microsoft.UpdateServices.Administration.PostInstall.Execute(String[] arguments)

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DonNetwork AdministratorCommented:
Are you installing WSUS from Server Manager -> Dashboard -> Add Roles and features -> Server Role -> Windows Server Update Service.  ???
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mrwildeAuthor Commented:
YES. I am getting warnings that the post-installation failed
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DonNetwork AdministratorCommented:
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