Had this error on my own Admin PC a few days ago while trying to run monthly updates, there is very little information about this error message out there however the main cause seems to be linked to the client PC being unable to communicate with the server due to invalid proxy setting.
One thing to remember is that Windows Update (on your clients) communicates with the WSUS server over HTTP (or HTTPS if you have it setup like this) and so needs to be able to communicate with it over HTTP – because of this Windows Update must know to not use a proxy server to talk to your internal WSUS server.
If you are having this error on multiple PCs and you have only just setup WSUS I would suggest that you check your network wide proxy settings (proxy.pac or wpad.dat) making sure that an exception is made for your WSUS server.
The same applies if you are configuring your proxy using group policy just make sure an exception is made for your WSUS server.
If you are having this error on a single PC then the two places to check are
- Internet Explorer Proxy Settings (if locally defined)
- Under system wide proxy settings (netsh winhttp)
Internet Explorer Proxy Settings
To check these settings (click for screen shot) go to Start > Control Panel > Internet Options > Connections > LAN Settings if you have use a proxy server ticked make sure under Advanced settings and Exceptions you have your WSUS server listed.
It is possible to set a proxy server other than the one used in IE for some applications. In my case this was the problem as I had set the proxy up but without any exceptions and so Windows Update could not talk to the WSUS server.
You can check if this is the same for you by running the command netsh winhttp show proxy from the command prompt.
If you do have a proxy setting in here you can remove it by running netsh winhttp reset proxy.
To find out more about this command (and also how to include a bypass proxy list) just run netsh winhttp set proxy /?