It is about 5:30 PM Central Time in USA on December 10, 2014. I reinstalled KB3004394 and rebooted and tried to install other Windows Updates and they still fail. I use Windows 7 SP1 Home Premium 64-Bit + All Updates. There have been no changes in the way this update affects me. Same thing from Tuesday afternoon till now.
Windows Update displays a Red Shield Error Icon with a white X over it. Saying "Some updates were not installed. Failed." "Error(s) found: Code: 800706F7 Windows Update encountered an unknown error."
I am logged in as Administrator at all times on this computer. No other accounts. I have been installing Windows Updates for my Windows 7 for years now. Never any problem like this. I have also installed Windows 7 from scratch many times in the past. Never any problems like this either.