KB3000850 is an optional, non-security update (yes, even though it may be offered as an Important update). Feel free to hide it & move on with your life.
• HOW TO Hide an Update or Restore a Hidden Update (good for Win8, too)
http://www.sevenforums.com/tutorials/24376-windows-update-hide-restore-hidden-updates.html
THANK YOU PA Bear! After several weeks of ignoring "we couldn't complete the updates, undoing changes" messages, interspersed with frustration at not being able to find the issue, your information above finally resolved it. I unchecked it and the 50+ other updates installed seamlessly.