I am having an issue with KB3004394 also.
After I install it, I can't install any other Windows Updates. I get an error message on Windows Update. I have already did some advanced troubleshooting and narrowed the problem down to KB3004394.
The update itself installs fine, but after a reboot, no other Windows Updates will install. As soon as I clicked Install Updates on other updates, it goes right to a red X and error message.
Removing the update and rebooting allows all other updates to complete as usual.
Windows 7 SP1 Home Premium + All Updates except for KB3004394.