windows vista - System Restore Error 0x490 (WinVista)

I have a friend who's having problems with their Vista box (yes the same friends as this question) and they gave it to me to fix.

So, here's the problem. On boot, you get the black DOS-like "Windows failed to start normally" window, with 2 options: Normal boot, and System Recovery.
Attempting a normal boot gets you the splash screen with the scrolling bar for about a minute, then the screen goes blank for another minute, then the BIOS screen comes back up and it starts all over.

System Restore does not work. Here's the Error Signatures from it:

01: AutoFailover
02: 6.0.6000.16386.6.0.6001.18000
03: 6
04: 327685
05: BadPatch
06: 0x50
07: 0
08: 2
09: WrpRepair
10: 2
OS Version: 6.0.6000.2.0.0.256.1

So, the BadPatch signature makes me think that there might have been a non-fatal network error when Automatic Update was downloading a patch, but not sure.

My next step was to look at the diagnostic log of the system recovery. The disk tests were all good so it is nothing to do with the hard disk. It did find some interesting stuff to maybe back up the bad update theory:

(Excerpt from diagnostic log)

ROOT CAUSE:
    Unknown Bugcheck: Bugcheck 8e. 
      Parameters = 0xC0000006, 0x82254560, 0x8b0b2808, 0x0.
    Repair action: System Restore
    Result: Failed. Error code = 0x490
    Repair action: System files integrity check and repair
    Result: Failed. Error code = 0x2

So, this was kinda backing up my theory. Then I delved a little deeper and found this:

(Excerpt from diagnostic log)

ROOT CAUSE:
    A patch is preventing the system from starting
    Repair action: System Restore
    Result: Failed. Error code = 0x490
    Repair action: System Restore
    Result: Failed. Error code = 0x490
    Repair action: System files integrity check and repair
    Result: Failed. Error code = 0x2

This looks like that my theory might be right.

So I looked up Error 0x490 and got this article on the subject. The only thing is, this assumes that you have access to msconfig and I don't. The only thing I have is regedit and a command line with admin privs.

My question is, is my assumption of a bad windows update patch correct?
And how would you go about fixing this? I do have a tool for reimaging the drive but I don't really want to go that far unless I have to.

EDIT: I can boot into Safe Mode now; I am trying the msconfig fix that Microsoft suggested

EDIT #2: Nope. Even disabling ALL the services didn't work

Answer

Well, it turns out that they had everything backed up with Carbonite, so I decided to take the easy way out and just reimage with a clean version of Vista.

Like I put in the edits, the Microsoft solution didn't work, so I think it was a corrupted kernel patch.
(There was no warning that this would happen, they just woke up and their computer was dead)