Deepfreeze & Windows Update reboot loop of DOOM!

Recently it was brought to my attention that one of our lab machines running Windows 7 and Faronics Deepfreeze was stuck in a reboot loop. Upon looking at it I found that it was displaying the normal windows start up logo with a black background and then going into updates. At the end of the updates it would reboot and start the process all over again.

After a little research I found a post that mentioned renaming the c:\windows\winsxs\pending.xml to prevent the system from attempting   to apply updates. I booted the system into System Recovery and selected command prompt and renamed the file. I then rebooted and it worked in-so-far as allowing the machine to boot up such that I could login and thaw it.

I found however that the machine was no longer able to patch through Windows Update. I re-installed Win 7 SP1 manually which gave an error message. Despite the error it rebooted and began patching normally. Saved me a little time over formatting and re-deploying the OS and all the applications.