Failure to install Windows 7 SP1

I am running Windows 7 Pro and cannot seem to install SP1.

I have tried the following to solve the issue, to no avail:
Executed sfc scannow.

End of CBS.log:
2015-07-17 10:10:05, Info                  CBS    Failed to find file: amd64_microsoft-windows-f..rcluster-powershell_31bf3856ad364e35_6.1.7601.17514_none_f273f11a257acc7b\FailoverClusters.psd1 [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Info                  CBS    Failed to gather all required files. [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Info                  CBS    Failed to gather all missing files for package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514 [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Info                  CSI    00000335@2015/7/17:16:10:05.566 CSI Transaction @0x1a9aa50 destroyed
2015-07-17 10:10:05, Error                 CBS    Failed to pre- stage package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514 [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Info                  CBS    Perf: Stage chain complete.
2015-07-17 10:10:05, Info                  CBS    Failed to stage execution chain. [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Error                 CBS    Failed to process Multi-phase execution. [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:05, Info                  CBS    WER: Generating failure report for package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514, status: 0x80070002, failure source: Stage, start state: Resolved, target state: Staged, client id: SP Coordinater Engine
2015-07-17 10:10:05, Info                  CBS    Failed to query DisableWerReporting flag.  Assuming not set... [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:07, Info                  CBS    Failed to add %windir%\winsxs\pending.xml to WER report because it is missing.  Continuing without it...
2015-07-17 10:10:07, Info                  CBS    Failed to add %windir%\winsxs\pending.xml.bad to WER report because it is missing.  Continuing without it...
2015-07-17 10:10:08, Info                  CBS    Reboot mark refs: 0
2015-07-17 10:10:08, Info                  CBS    SQM: Reporting package change for package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514, current: Resolved, pending: Default, start: Resolved, applicable: Installed, target: Staged, limit: Staged, hotpatch status: StillGoing, status: 0x0, failure source: Stage, reboot required: False, client id: SP Coordinater Engine, initiated offline: False, execution sequence: 2003, first merged sequence: 2003
2015-07-17 10:10:08, Info                  CBS    SQM: Upload requested for report: PackageChangeBegin_Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514, session id: 101457923, sample type: Standard
2015-07-17 10:10:08, Info                  CBS    SQM: Ignoring upload request because the sample type is not enabled: Standard
2015-07-17 10:10:08, Info                  CBS    SQM: Reporting package change completion for package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514, current: Resolved, original: Resolved, target: Staged, status: 0x80070002, failure source: Stage, failure details: "(null)", client id: SP Coordinater Engine, initiated offline: False, execution sequence: 2003, first merged sequence: 2003
2015-07-17 10:10:08, Info                  CBS    SQM: stage time performance datapoint is invalid. [HRESULT = 0x80070490 - ERROR_NOT_FOUND]
2015-07-17 10:10:08, Info                  CBS    SQM: execute time performance datapoint is invalid. [HRESULT = 0x80070490 - ERROR_NOT_FOUND]
2015-07-17 10:10:08, Info                  CBS    SQM: Upload requested for report: PackageChangeEnd_Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514, session id: 101457924, sample type: Standard
2015-07-17 10:10:08, Info                  CBS    SQM: Ignoring upload request because the sample type is not enabled: Standard
2015-07-17 10:10:08, Info                  CBS    Enabling LKG boot option
2015-07-17 10:10:08, Info                  CBS    Restored system sleep block state: 0x80000000
2015-07-17 10:10:08, Info                  CBS    SPI: Error callback - 0x80070002
2015-07-17 10:10:08, Info                  CBS    Exec: Processing complete.  Session: 30458023_1756346524, Package: Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514 [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:09, Error                 CBS    Failed to perform operation.  [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:09, Info                  CBS    Session: 30458023_1756346524 finalized. Reboot required: no [HRESULT = 0x80070002 - ERROR_FILE_NOT_FOUND]
2015-07-17 10:10:09, Error                 CBS    SPI: (CSPICbsClient::Finalize:737)Failed to finalize session hr=0x80070002
2015-07-17 10:10:09, Error                 CBS    SPI: (CSPICbsClient::ChangeState:519)Failed to finalize CBS session to install package hr=0x80070002
2015-07-17 10:10:09, Error                 CBS    SPI: (CSPCInstallTask::Execute:1010)Failed to install package with identity Package_for_KB976932~31bf3856ad364e35~amd64~~6.1.1.17514 hr=0x80070002
2015-07-17 10:10:09, Info                  CBS    SPI: Reporting Failed package event
2015-07-17 10:10:09, Error                 CBS    Cannot finalize a session that has been finalized. [HRESULT = 0x800f0842 - CBS_E_SESSION_FINALIZED]
2015-07-17 10:10:09, Info                  CBS    Session: 30458023_1756346524 finalized. Reboot required: no [HRESULT = 0x800f0842 - CBS_E_SESSION_FINALIZED]
2015-07-17 10:10:09, Error                 CBS    SPI: (CSPICbsClient::Finalize:737)Failed to finalize session hr=0x800f0842
2015-07-17 10:13:56, Info                  CBS    SPI: Deleting directory: C:\bdf0599aa578b5a57e84c1e6f29c\fd4f82ec7ef8fa64a688966ab1bd\d25fbc4d6b7c08fefafc20.  ret=0
2015-07-17 10:13:56, Error                 CBS    SPI: (CSPInstall::Install:1583)Failed executing Install task hr=0x80070002
2015-07-17 10:13:56, Info                  CBS    SPI: Ending SP Installation
2015-07-17 10:13:56, Error                 CBS    SPI: (PerformSPInstallation:833)Failed to install SP using UI hr=0x80070002
2015-07-17 10:13:56, Error                 CBS    SPI: (wmain:1105)Failed to perform SP installation hr=0x80070002
2015-07-17 10:13:56, Info                  CBS    SPI: Reporting Failed event

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bejhanAsked:
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rindiCommented:
As this must be a fresh installation anyway, something probably went wrong, and I'd just do the installation again as that is a quick procedure, then as one of the first things try installing the SP.
bejhanAuthor Commented:
This is not a fresh installation, what gives you that indication?
jcimarronCommented:
bejhan--
You have so many errors (and SFC did not fix them).  A Repair Install might be the quickest way to correct things.
http://www.sevenforums.com/tutorials/3413-repair-install.html
This should not affect your personal data or installed programs, but it is always a good idea to backup first.
rindiCommented:
Because SP1 is old and should have been installed many years ago. Support for Windows 7 without SP ended in 2013, so all those patches are missing and the PC is completely insecure and has probably been compromised and attacked a long time ago anyway. So also because of that it should be freshly installed.

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bejhanAuthor Commented:
Yes SP1 is old and I was quite surprised to find out it had not been applied to this machine. Apparently Windows Update has been failing silently this whole time!

I will just do a fresh install.
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Windows 7

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