All servers in hierarchy are 2008 R2.
I published the update to upstream server.
Update validation clearly fails during windows update.
Certificate and API validation passes.

Deployed Adobe full 11 to two windows 7 lab guests

WSUS Lab GPO (Including publishing cert into trusted publisher)

Windows Update Log from the client:

Trusted Publisher - Code signing cert is present in both the Computer & User store on affected client.
Cert chain is ok.

Advice is appreciated.
Thanks,