Microsoft Update Error 0x80096010 / Genuine Advantage Errors

I'm unable to run Microsoft Update. I get error 0x80096010

Here are the last couple lines from WindowsUpdate.log

WARNING: Error: 0x80096010 when verifying trust for
WARNING: Digital Signatures on file
C:\WINDOWS\SoftwareDistribution\WebSetup\ are not trusted:
Error 0x80096010

I tried all the steps in except an
in-place (re)install and nothing helped.

When I try to run the Microsoft Genuine Advantage – Diagnostic Site
I get the following result.

Passed Active scripting allowed
Passed Display images enabled
Passed Computer time and date correct
Passed ActiveX enabled
Passed Windows validation ActiveX loaded
Failed Office validation ActiveX loaded
Failed Validation Self-help ActiveX loaded

It appears to fail because when I try to install the ActiveX control, I get
IE Security Warnings:

Windows has found problem with this file.
Name: ?linkid=58813
Publisher: Unknown Publisher
(This file was blocked because it does not have a valid digital signature
that verifies its publisher.


Windows has found problem with this file.
Name: ?linkid=52580
Publisher: Unknown Publisher
(This file was blocked because it does not have a valid digital signature
that verifies its publisher.

Using the Resolve Now button does not help as I continue to get the same

What should I try next???

This is an HP Pavilion with XP Home SP2
Here's the MS Genuine Advantage Diagnostic Tool output:
Diagnostic Report (1.7.0039.0):
WGA Data-->
Validation Status: Genuine
Detailed Status: N/A
Cached / Grace status: N/A, N/A
Windows Product Key: *****-*****-BRVBB-38MQ9-3PMFT
Windows Product Key Hash: 2V2VyxlfhiaCt/JkDzYQfiNOHMA=
Windows Product ID: 76477-OEM-2111907-00106
Windows Product ID Type: 2
CSVLK Server: N/A
Windows License Type: OEM SLP
Windows OS version: 5.1.2600.2.00010300.2.0.hom
ID: {AFDD21F8-009D-4C5F-B65D-CDBC81C57573}(3)
Is Admin: Yes
Commit / Reboot / BRT: N/A, N/A, N/A
WGA Version: Registered,
Signed By: Microsoft
Product Name: N/A
Architecture: N/A
Build lab: N/A
TTS Error: N/A
Validation Diagnostic: 025D1FF3-171-1
Resolution Status: N/A

Notifications Data-->
Cached Result: 0
File Exists: Yes
Version: 1.5.540.0
WgaTray.exe Signed By: Microsoft
WgaLogon.dll Signed By: Microsoft

OGA Data-->
Office Status: 100 Genuine
OGA Version: Failed to retrieve file version. - 0x80070002
Signed By: N/A, hr = 0x80070002
Office Diagnostics: FCEE394C-2993-80070002_025D1FF3-171-1

Browser Data-->
Proxy settings: N/A
User Agent: Mozilla/4.0 (compatible; MSIE 6.0; Win32)
Default Browser: C:\Program Files\Internet Explorer\iexplore.exe
Download signed ActiveX controls: Prompt
Download unsigned ActiveX controls: Disabled
Run ActiveX controls and plug-ins: Allowed
Initialize and script ActiveX controls not marked as safe: Disabled
Allow scripting of Internet Explorer Webbrowser control: Disabled
Active scripting: Allowed
Script ActiveX controls marked as safe for scripting: Allowed

File Scan Data-->
File Mismatch: C:\WINDOWS\system32\ntoskrnl.exe
File Mismatch: C:\WINDOWS\system32\kernel32.dll

Other data-->
Office Details:
Pavilion 061</Manufacturer><Model>PS567AA-ABA
a1000n</Model></SYSTEM><BIOS><Manufacturer>Phoenix Technologies,
LTD</Manufacturer><Version> 3.04</Version><SMBIOSVersion major="2"
Office Standard Edition