Windows 2012 R2 server cannot install updates

Hi,
I am having trouble performing a windows update on a windows server 2012 R2 box.
Everytime i go to update it, the box freezes at downloading 0%. If i try to stop the download, the process and service seem to freeze and the only way to move forward is to taskkill /f on the process for wuauserv.
I have tried running a dism.exe cleanup and deleting the %windir%\SoftwareDistribution\Download folder as ive seen in some other threads but neither have given me any success.
I also tried running individual updates one at a time and still seem to freeze up.
from the update log file I'm seeing error 0x80240037 but im not sure what to make of it and research on the error hasn't helped much.
Below is a snippet of the windowsupdate log file. Any help would be greatly appreciated.
2014-12-04 22:50:14:841
1900 db4
Agent * Added update {06729A87-4AF6-4208-A94C-3BF36583E573}.210 to search result
2014-12-04 22:50:14:841
1900 db4
Agent * Added update {086110F9-6500-4ADA-902D-7861CD2CD90B}.206 to search result
2014-12-04 22:50:14:841
1900 db4
Agent * Added update {3827A9E8-65AF-444E-BBEF-94E3591DBC0F}.210 to search result
2014-12-04 22:50:14:841
1900 db4
Agent * Found 43 updates and 14 categories in search; evaluated appl. rules of 767 out of 1362 deployed entities
2014-12-04 22:50:14:856
1900 d04
Report REPORT EVENT: {01FA6BE4-87F7-444A-A785-A979FDAE9F62}
2014-12-04 22:50:14:841-0700 1
147 [AGENT_DETECTION_FINISHED] 101
{00000000-0000-0000-0000-000000000000}
0 0 AutomaticUpdatesWuApp
Success Software Synchronization
Windows Update Client successfully detected 43 updates.
2014-12-04 22:50:14:856
1900 db4
Agent *********
2014-12-04 22:50:14:856
1900 db4
Agent ** END ** Agent: Finding updates [CallerId = AutomaticUpdatesWuApp Id = 32]
2014-12-04 22:50:14:856
1900 db4
Agent *************
2014-12-04 22:50:14:856
1900 db4
IdleTmr WU operation (CSearchCall::Init ID 32, operation # 7) stopped; does use network; is not at background priority
2014-12-04 22:50:14:856
1900 db4
IdleTmr Decremented idle timer priority operation counter to 1
2014-12-04 22:50:14:856
1900 5e4
AU >>## RESUMED ## AU: Search for updates [CallId = {2F593F92-4EDC-4632-BC5B-4CE7BF6D410F} ServiceId = {9482F4B4-E343-43B6-B170-9A65BC822C77}]
2014-12-04 22:50:14:856
1900 5e4
AU # 43 updates detected
2014-12-04 22:50:14:856
1900 d04
Report CWERReporter finished handling 10 events. (00000000)
2014-12-04 22:50:14:856
1900 d04
Report CWERReporter finished handling 10 events. (00000000)
2014-12-04 22:50:14:856
1900 d04
Report CWERReporter finished handling 10 events. (00000000)
2014-12-04 22:50:14:856
1900 d04
Report CWERReporter finished handling 10 events. (00000000)
2014-12-04 22:50:14:856
1900 5e4
AU #########
2014-12-04 22:50:14:856
1900 5e4
AU ## END ## AU: Search for updates [CallId = {2F593F92-4EDC-4632-BC5B-4CE7BF6D410F} ServiceId = {9482F4B4-E343-43B6-B170-9A65BC822C77}]
2014-12-04 22:50:14:856
1900 5e4
AU #############
2014-12-04 22:50:14:856
1900 5e4
AU All AU searches complete.
2014-12-04 22:50:19:856
1900 d04
Report CWERReporter finished handling 4 events. (00000000)
2014-12-04 22:50:26:121
1900 7c0
AU AU received approval from UX for 1 updates
2014-12-04 22:50:26:121
1900 7c0
AU AU setting pending client directive to 'Progress Ux'
2014-12-04 22:50:26:215
1900 698
AU BeginInteractiveInstall invoked for Download
2014-12-04 22:50:26:215
1900 698
AU Auto-approving update for download, updateId = {5FC10D02-C5FF-4A60-9F4B-B34BB8164004}.200, ApprovalIsForUx=1, UpdateOwner=UX, HasDeadline=0, IsMinor=0
2014-12-04 22:50:26:215
1900 698
AU Auto-approved 1 update(s) for download (for Ux)
2014-12-04 22:50:26:215
1900 698
AU WARNING: Failed to get Wu Exemption info from NLM, assuming not exempt, error = 0x80240037
2014-12-04 22:50:26:215
1900 698
AU #############
2014-12-04 22:50:26:215
1900 698
AU ## START ## AU: Download updates
2014-12-04 22:50:26:215
1900 698
AU #########
2014-12-04 22:50:26:215
1900 698
AU # Approved updates = 1
2014-12-04 22:50:26:215
1900 698
AU WARNING: Failed to get Wu Exemption info from NLM, assuming not exempt, error = 0x80240037
2014-12-04 22:50:26:215
1900 698
AU WARNING: GetCurrentNetworkCostPolicy failed, error = 0x80240037
2014-12-04 22:50:26:215
1900 698
IdleTmr Incremented idle timer priority operation counter to 2

from the update log file I'm seeing error 0x80240037 but im not sure what to make of it and research on the error hasn't helped much.
Below is a snippet of the windowsupdate log file. Any help would be greatly appreciated.
2014-12-04 22:50:26:215 1900
698 AU
WARNING: Failed to get Wu Exemption info from NLM, assuming not exempt, error = 0x80240037
2014-12-04 22:50:26:215 1900
698 AU
WARNING: GetCurrentNetworkCostPolicy failed, error = 0x80240037
2014-12-04 22:50:26:215 1900
698
0x80240037 is nothing to worry about, this is an "expected" error/warning if the computer is connected to a wired network.
Keep looking through the WindowsUpdate.log - nothing else you've shown us above describes any errors at all..
Don
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