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MSI based installers fail or take several hours to install

I cannot install, remove or repair any applications on my Server 2008R2 Server running Citrix Xenapp 6.5. The Windows Installer will hang on "gathering required information" and eventually error out with "Installer is no longer responding". I have tried the following

1. Enabling MSI logging
2. Rebooted the server
3. Checked the registry for any "In progress" keys
4. Tried installing applications as the local and domain admin
5. Started windows in selective startup
6. Unloaded the Anti-Virus (currenlty running Trend Micro WFBSA 9.0)

One thing worth mentioning is that the server is running a RAID and has a failed disk that will be replace within the next week, however server performance does not appear to be impacted by this.

Attached is a log for attempting to install 7-zip
7zip.log
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Sekar Chinnakannu
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Download this tool http://www.microsoft.com/en-us/download/details.aspx?id=25 and install, then give a try. If still having issue then wait still replacement of failed disk and check.
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I tried to run the tool and go the error "not enough storage is available to process the command". This install is not for Server 2008R2 it's for Server 2003 and below.
here you go for 2008 r2 https://support.microsoft.com/en-us/kb/893803
try with 4.5 version
I can't as the version 4.5 is only applicable for Server 2008 (non R2) and below. I get the following message

Important Windows Installer 5.0 is released with the following operating systems. Therefore, Windows Installer 4.5 does not apply to these operating systems.
Additionally, there is no redistributable for Windows Installer 5.0.
Windows 7
Windows 7 SP1
Windows Server 2008 R2
Windows Server 2008 R2 SP1
Windows 8
Windows Server 2012
Windows 8.1
Windows Server 2012 R2
How to obtain W
From the logs it looks like something is failing to launch. I've seen something similar when scripting (wscript/cscript) is disabled.

What I would personally do, is get a hold of process monitor from Sysinternals (Microsoft) and filter on msiexec.exe then re-run the installer.

I assume you're running as an administrator, from the console and with no users logged on?
Correct process mon, returns nothing when the msiexec.exe process filter is applied.
I know you've attached the log for 7-Zip but from what you've said, I assume you get a similar issue with other applications?
Correct, they all stop at the same place and the installer stops responding. I have tested this with at least 5 MSI installs.
Hmm how very odd.

Can you rerun one without verbose logging (just normal logging)? There's so much detail in verbose it may be masking something.

Also...it's been a while since I last used it but MS had an MSI repair tool. Looks like they've since replaced it with a fixit tool you may want to try - https://support.microsoft.com/en-us/kb/290301
I have run the MSI Repair tool and it did not detect any issues, please find attached the msi log with only the /L* switch
7zip.log
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The solution resolved the issue perfectly