Visual Studio 2010 SP1 reapplication fails

My first attempt to install VS 2010 SP1 failed as the setup hanged (see Visual Studio 2010 Service Pack 1 installing for over 2 hours could be a sign of a problem). The real problem was the rollback also hanged and this is always a sign of big trouble.

After reboot I started SP1 setup again and chose to reapply SP1. In a while I was prompted to find silverlight_sdk.msi because the installer could not have found it. It is located in the Silverligh4/1033 folder on the installation media. The installer seemed to be happy with my choice and continued. Almost at the end of the installation I was prompted again – now for the vc_runtime_x86.msi  - twice and then again twice for vc_runtime_x64.msi. However, the message at the end of the installation was not what I wanted to see: Reapplication did not succeed. The very same a few times I tried it again and again.

VS 2010 SP1 log reads:

Final Result: Installation failed with error code: (0x80070643), "Fatal error during installation. " (Elapsed time: 0 00:33:06).

The big SP1 log contains links to logs of all setup it runs, including setup for Silverlight 4 SDK and VC++ runtimes.

The log for Silverlight 4 SDK:

MSI (c) (DC:98) [16:40:02:132]: SOURCEMGMT: Trying source E:\Silverlight4\1033.
MSI (c) (DC:98) [16:40:02:231]: Cloaking enabled.
MSI (c) (DC:98) [16:40:02:232]: Attempting to enable all disabled privileges before calling Install on Server
MSI (c) (DC:98) [16:40:02:232]: Connected to service.
MSI (c) (DC:14) [16:40:02:253]: SOURCEMGMT: Resolved source to: 'E:\Silverlight4\1033\'
MSI (s) (EC:10) [16:40:02:259]: Product: Microsoft Silverlight 4 SDK -- Error 1706.No valid source could be found for product Microsoft Silverlight 4 SDK.  The Windows Installer cannot continue.

Error 1706.No valid source could be found for product Microsoft Silverlight 4 SDK.  The Windows Installer cannot continue.

The solution is to manually uninstall Silverlight 4 SDK and Visual C++ runtimes (both 32- and 64-bit flavors) from the Programs and Features Control Panel applet (aka Add Remove Programs).

And then