Overview
I had a strange issue where a Win 2012 server would try to install 183 updates, download, install (phase 1), reboot, fail, and roll-back. It was very aggravating to say the least. I tries some of the more common troubleshooting steps. Tried googling. Restarted the Windows Updates and BITS services etc... Nothing worked.
The Fix
Mount the Windows ISO that corresponds to your OS (For this example its mounted on drive E:).
Run the following command:
DISM /Online /Cleanup-Image /RestoreHealth /Source:E:\Sources\install.wim
The run:
sfc /scannow
Restart the Windows Update service.
Launch Windows Update and check for updates.
Select updates for download and install (Start with a small number to make sure it works).
Install updates and reboot.
If for some reason updates won't download and you get Error 80246013 restart BITS and Windows Update services.
Reference
https://support.microsoft.com/en-us/kb/947821#bookmark-checksur
http://www.windowscentral.com/how-use-dism-command-line-utility-repair-windows-10-image