i saw a very similar error but mine said "...could not access network location \webdesk\". Odd thing was, I was not installing webdesk. Drove me mad finding the answer but it turned out to be a permission error on the user account i was logged into the system as. Even though I was assured it was the local admin logged into the account, there is a subtle difference between the original local admin account that comes with the OS and any additional local admins you create. So try logging in as the true local admin and if that fails even after assurances from Bill Gates that it really is the local admin check if the UAC is switched off. That was the only difference between the two local admin accounts and after setting it, voila the error message was history.
Hope this help...