Hi,

Thank you for posting in Microsoft Community.

I appreciate your efforts in performing SFC scan and also running repair and clean tools.

I suggest you to refer to the post of Anshul Arona on Feb 13, 2014 and follow the steps as suggested from the below link.

http://answers.microsoft.com/en-us/windows/forum/windows_7-windows_update/net-framework-35-fails-with-error-0x80070643/0115e938-f11f-4b0d-a15b-8985548b9dd7

I also suggest you to disable Antivirus software temporarily and check if it helps.

http://windows.microsoft.com/en-US/windows7/Disable-antivirus-software

Note: Antivirus software can help protect your computer against viruses and other security threats. In most cases, you should not disable your antivirus software. If you do have to temporarily disable it to install other software, you should re-enable it as soon as you're done. If you are connected to the Internet or a network during the time your antivirus software is disabled, your computer is vulnerable to attacks.

Keep us updated about the status of the issue.

Hello Ganesh, many thanks for your suggestion and apologies for my late reply.

I had posted the same question to the German forum from where the suggestion came to apply an inline update. Unfortunately only an inline update has solved the issue. Which I find very disappointing because obviously it is very time consuming.

What I find particularly strange is that I restored an image from only a short period after the clean installation of Win7 and still the error occurred. Which means that a sleeping error was present on the machine for months for no obvious reason and only became obvious at the attempted installation of a new .net framework version.

Thx again for your support

Jochen

The fix of this issue is to rename c:\program data\microsoft\crypto\RSA\S-1-5-18 and try re-installation of .net again.

I had an issue after installed Just Cause 3 through Steam.  The game wouldn't launch after trying to install Visual Studio Redistributable 2010.

A look in the error logs led me to:

Product: Microsoft Visual C++ 2010  x86 Redistributable - 10.0.30319 -- Error 997.Overlapped I/O operation is in progress.

Tried many things, but Rajesh's solution is the only one that worked.

Good luck!

***You don't have to rename/delete this folder!!***

Just right click Properties and add a folder permission to it for "SYSTEM" and grant it "Full Control".

I hit this error myself trying to install .NET Framework 4.6.1 (Both the install via Windows Update and the MS downloaded installer file were failing with the above error in the logs.) None of the standard troubleshooting/Fixit/.Net Cleanup utilities did anything to resolve the issue.

While Rajesh's suggestion of re-naming the folder does indeed allow the .NET install to succeed, what ends up happening is the "S-1-5-18" folder gets re-created when the installer runs. Considering I'm pretty sure this folder houses some of your user account(maybe) RSA private keys, I would think that even renaming the folder just removed those private keys from ever being accessed again. So you had better hope nothing important was signed/encrypted with them.

Not liking that prospect I kept googling and found another old article talking about issues with .NET 3.5 that suggested Local System needed file permissions on some folder and adding it allowed that install to complete successfully.  I ripped out .NET 4.6.1 and put my original "S-1-5-18" folder back the way it was before renaming it and sure enough the .NET 4.6.1 install failed yet again. Then tried out simply adding the file permission to the folder and BOOM! .NET install suddenly succeeded without so much as a reboot and everything that was in my "S-1-5-18" folder stayed put! FTW.

Thank you so much.   It worked! 

In case you get permission denied errors when trying to set the permissions to the RSA directory, to take ownership of all files and folders in the RSA directory you can run the following commands:

cd c:\ProgramData\Microsoft\Crypto\RSA

takeown /f * /a /r

You should then be able to add System with full control to the directory and it's subdirectories without issue.