Your system is stuck for some reason on one of the 4 parts of the SP1 update. Out of the 4, it is the only one that keeps saying it is Queueing the download rather than "already downloaded".
The location it is trying to retrieve the file from is:
C:\windows\
SoftwareDistribution\
Download\
18e2c83e42cc8f0cc17b5dbfaf982690
Not sure exactly what the system will allow you to delete, but I would start by trying to delete that location (18e...) and see what happens. Maybe it will resync itself.
If that does not help, delete or rename the
Download folder. Again give it time to correct, and it might take enough time to re-download the files.
If that doesn't help, then rename the
SoftwareDistribution folder. It will also take quite a while (maybe days) for the system to reset.
There is information kept in the Registry that seems to keep track of the updates and what packages are available and ready, but I do not know any changes that could or should be made there.
The error means that access to the file is denied or it is missing. Since this is the only file with that error, I will have to believe it is missing or corrupted.
If you want to check the WindowsUpdate.log yourself, use notepad and search from the bottom up for the word
FATAL which should have other text like the quote below.
Starting install of CBS update 9B3E0557-1739-409A-AFE2-CE51B1CC706F
Handler CBS package identity: Package_for_KB976932~31bf3856ad364e35~x86~~6.1.1.17514
Handler Installing express with source=C:\windows\SoftwareDistribution\Download\18e2c83e42cc8f0cc17b5dbfaf982690, workingdir=C:\windows\SoftwareDistribution\Download\18e2c83e42cc8f0cc17b5dbfaf982690
Handler FATAL: CBS called Error with 0x80070490,
Edit: The CBS mentioned sends messages to a CBS.log in the Windows\Logs\CBS folder. You would also have to copy it to the desktop and open with notepad. Do a search for the error number.