Windows Update Loop - Build 26200.8117 - FAILED [AppxPackage::Initialize:235] Error 0x80070032

Hello, I am facing a persistent Windows Update installation loop on Windows 11 Build 26200.8117 (KB5094126) and need some help before a travel deadline in 5 days. The update downloads to 100%, but during initialization it fails, loops endlessly, pins my CPU, and causes high thermal strain with loud fan noise when plugged into my AC charger.
CRITICAL CONSTRAINT: I am running a highly customized setup. I cannot run any automated repair scripts, in-place reinstalls, or tools that risk resetting or overwriting my legacy AMD graphics drivers, custom thin system fonts, or fine-tuned ASUS display brightness thresholds.
System Specifications:

• OS Edition: Windows 11 Home Single Language (Retail Channel, 25H2)
• OS Build: 26200.8117
• Hardware: ASUS Laptop M413A
• Processor: AMD Ryzen 7 4700U with Radeon Graphics

Troubleshooting Already Done:

1. Ran SFC /scannow and DISM RestoreHealth earlier this week (both report 100% clean component store, no corruption found).
2. Cleared out the C:\Windows\SoftwareDistribution cache and old .etl logs to get a clean data track.
3. Verified via Windows Security (Device Security) dashboard that Secure Boot is active and all certificate updates are perfectly applied. Note: The physical path C:\Windows\SecureBoot\Scripts does not exist on my drive.

Isolated Failure Trace (From clean logs right at the loop point):
2026/07/24 20:28:52.4477861 *FAILED* [80070032] Method failed [AppxPackage::Initialize:235]
Log Links (Split into 5 parts due to Pastebin text size limits, Part 1 holds the main crash lines around 20:28:52,):


Section 1: 2026/07/24 20:28:18.0597218 20460 6368 Misc Load undocked module: Uu - Pastebin.com

Rest are for reference:

Section 2: 2026/07/24 20:29:28.5193063 20460 10536 Agent Search Scope = {Machine - Pastebin.com

Section 3: 2026/07/24 20:30:37.3033286 20460 19152 Agent Total allowed fede - Pastebin.com

Section 4: 2026/07/24 20:30:55.2404793 20460 16452 Agent - Pastebin.com

Section 5: 2026/07/24 20:32:26.1325789 20460 6740 DownloadManager Handler (9) for update F - Pastebin.com
Does anyone know how to safely fix this specific AppxPackage initialization registry failure without touching or resetting my custom display configuration and active device drivers? Any insight would be greatly appreciated. Thank you!

For @zbook to analyze your log files you must follow these instructions as the logs have to be in a format his analyzer can read and interpret. Follow the instructions exactly and upload to any cloud provider. Post a SHARED link here. BSOD - Posting Instructions

KB5094126 is the June update. Have you had this problem since June? One solution would be to restore a system image made at a time when WU was working normally. (if you have one)

These are GENERAL WINDOWS UPDATE PROBLEMS things to try. Some which you indicated you tried, some you haven't, and others which you say you can't try or don't want to try for whatever reason. I learned a long time ago that at times we are at the mercy of the problem at hand and have to do what must be done when we experience certain issues. Not all issues have an easy, obvious fix.

1. Run troubleshooter-settings-system-troubleshoot-other troubleshooters-windows update-RUN.

2. Reset Windows update using Brink's tutorial Reset Windows Update in Windows 11 Tutorial

3. Open command prompt as administrator. Enter this command.
dism /online /cleanup-image /restorehealth
When complete, Restart computer

Then open command prompt as admin again and run sfc /scannow
Pay attention to the scan results to see if SFC found anything it could not repair

4. CLEAN UP COMPONENT STORE - dism /online /cleanup-image /startcomponentcleanup
Analyze and Clean Up Component Store (WinSxS folder) in Windows 11 Tutorial

5. Do a repair install. This usually works when nothing else will. Repair Install Windows 11 with an In-place Upgrade Tutorial