Well, trying to reconfigure the process can be done but it isn't easy. I have been looking at your log and it tries to get the normal recovery configuration from the recovery folder and cannot. It then goes to the Windows folder to get one and cannot.
It even tries to use a PBR image to get what it needs but that also seems to fail.
Since you still have mentions of Skydrive on your system, I will assume you have been using that install for quite a while. Maybe first, if you have a copy of your current build install media you could do an in-place upgrade which only refreshes your install
and does not wipe out other things unless you tell it to. Skydrive may be responsible for the DefaultAPPPOOL situation.
Barring an in-place upgrade it may be time to reinstall. Since the new build should be out in the not too distant future, you could use the time to get ready.