From these posts I ascertained the following:

1. An install of security software may interfere with installation (I've read some links to discussion of 1935 errors that suggest firewalls can also cause failures). 
2. A broken .NET Framework can cause this error. 
3. A missing TrustedInstaller.exe can cause this error.
4. Running services can cause this error. 
5. Previous installs of MSO can cause errors. 

Diligently, I addressed these issues one by one.  I uninstalled .NET Framework 4, Silverlight, and Visual C++ using the control panel and "FixIt" script tools Microsoft provides to remove vestiges of these services from the registry.  I verified that TrustedInstaller.exe was in its expected home (it was).  I turned off all non-essential, non-Microsoft services (a "clean" boot).  I disabled active monitoring in my security software.  I tried first a clean boot, then a boot to safe mode.

I probably spent 14-16 hours on this "project", including a wasted weekend day, between digging around online and implementing the suggestions.

At the end of the day I still returned to the same old thing -- the dreaded "Error 1935".

To be clear I've never seen any signs of a malware infection and I keep my computer well protected and monitored, so this appeared to be solely a Microsoft Windows/Office issue. 

Now I'm a DIY person and I spent a year working as an IT support engineer at an automotive plant (a co-op), so I tend to want to solve problems myself.  But at this point I admitted defeat.  I would have to contact Microsoft.

II. Into the Merry World of MSFT Tech Support

I first posted a post to Microsoft Answers.  I explained in explicit detail my problem, what I had done, and the fact that I was a journalist and was going to report on my experience (ethically, journalists should always inform people when they're "on the record").

My post can be found here:

I waited a few days and received a couple of suggestions, but as you'll see in my comments, they didn't work out.

So I picked up the phone and called Microsoft's phone support.  Now Microsoft Office 2010 Professional retails for $420 USD or more, so I would expect outstanding support.  Sadly, I would soon discover Microsoft had no answers for me.

I spoke with Microsoft Office support engineers first.  Overall, these engineers did about as good a job as I could expect in this situation -- they basically listened carefully to what I'd done, asked me some additional questions to make sure that I really exercised due diligence in all fields, and were friendly and sympathetic.

At the end of about 3 hours, one MSO support engineer told me, "Well I can understand your frustration, you've pretty much done everything already that we would have suggested."

I appreciated the sentiment.

They brought in their local Windows support engineer, and again the experience was relatively good -- but still no solutions.  In this case, at least we got a bit closer to the root issue.  They identified that the non-mandatory Windows Service Pack 1 update had never installed (to be honest, I never bothered to look or think of that) and also identified that my Windows Updates window perplexing showed up blank, despite the fact that I installed updates.

Ah, now I was on to something.  I end my phone call at about 4-5 hours, explaining that I would attempt to install the service pack.

After getting off the phone I tried to manually carry out a series of updates to get me to the service pack.  But I kept getting a failure in "check for system update readiness" tool (as shown by my CheckSUR logs).  I spent more time digging around based on the error messages I found my %temp% logs, but again found no real answers.

III. The Final Solution

Later in the day I received a follow up call from a Windows Team support engineer (not affiliated with the Office team).  This was a very different experience.  There seemed to be a huge communications problem -- perhaps a language barrier.  They wasted probably 45 minutes trying to tell me how to reinstall the .NET Framework, despite my repeated assurance "I've already done that!"

Finally after wasting a large amount of my time and seeming to understand nothing of what I was saying, the engineer suggested that I do a repair installation.  Now that sounded reasonable enough, but I had a small problem -- I had purchased an upgrade copy of Windows 7 and couldn't locate the DVD I burned my ISO to -- and the download link no longer worked.

So I went to a certain torrent site and downloaded a fresh Windows 7 Pro ISO (I had my product key from my email I dug up at least, so I was all set in that regard).  I could probably have contacted my vendor (Digital River), but at this point I was pretty frustrated with phone support, so I opted simply the torrent route.

I finally got my DVD all ready and tried the repair, but saw no success.  I still receive the exact same error I had receive since day 1.

At this point, feeling like I was stuck in some sort of bad Apple commercial parody, I made an executive decision.  

I'd wasted literally over 24 hours searching online trying fixes, and another 6-7 hours on the phone with Microsoft.  I decided to cut my losses and simply back up my data and do a fresh install.

I reinstalled Windows, manually ran all the updates, installed MSO 2010 Pro. with not so much as a protesting peep from the installer.  Everything ran beautifully.  The only issue is I now have at least several more hours of work ahead of me reinstalling yet more applications and copying over save data (from games) and my documents.

Today, I received a friendly follow-up call from a MSO team support engineer, a day after my clean install was complete.  The discussion was quite enlightening -- again in my brief experience the MSO team was MUCH better communicators that the Windows team, with the exception of the MSO team's local Windows support engineer.

The MSO engineer told me that what I had experienced was a .NET corruption issue -- one they had actually personally experienced themselves.  They said that they had "personally collected several of these logs" and that I was not alone -- a small subset of users were experiencing the same issue.

They said the Windows team was working on a fix and that it was a known problem.  They finally concluded by promising to keep me updated on the progress with the fix and politely apologizing for my inconvenience.

And so concluded my interesting experience with the world of Microsoft's support system.

IV. Conclusions

To wrap this up let me summarize what I've learned:

• A small number of users are unable to install Microsoft Office due to a persistent .NET Framework 4 corruption issue in Windows 7.  It is unclear exactly how many users are affected -- it's clearly not the majority, but it's also clear that it's more than just 1 or 2 (remember also there's millions of MSO users).
• Microsoft has known about this problem for over a year and has thus far been unable to fix it.
• The only solution at this point is a clean install of Windows.  In some cases repair installations and other tricks will not solve the underlying problem.
• The problem makes users unable to install Internet Explorer 9 and Microsoft Office.
• The problem affects users with a variety of hardware configurations (HP, Dell, Apple, etc.) and a variety of operating system versions (from Windows 7 Home Premium 32-bit to my own Windows 7 Professional 64-bit).

To me this experience has been a very frustrating one, and a disheartening one when it comes to Microsoft, whom I've generally felt is improving its performance in the consumer software market.  I scanned through the Microsoft Answers database and saw a whopping total of 39 unresolved posts on "Error 1935".  And one must assume that for ever user who takes the time to use that particular forum, there's more who post on TechNet, dozens more who call tech support, and even more who simply give up and just reinstall Windows.

Given this information, I would estimate that as many as 1,000 users (times however many systems they're running) could be affected by this problem, though some may be suffering in silence.  I wanted to speak up because, if you're having this issue I know what you went through, and I know the frustration of not getting a real solution from Microsoft and hearing that you've tried everything they could think of.

I've used Linux for years and have seldom encountered a problem I couldn't fix with some research and surgical operations to my underlying system applications.  I understand Microsoft benefits off of a more "closed boxed" model, à la Apple's "it just works".  

But the problem is that when the components inside the closed box break, Microsoft must fix them in a timely fashion.  Microsoft often seems perplexed and sluggish in generating a solution.  The final MSO team engineer explained to me that MSO was entirely dependent on the .NET Framework and Visual C++ in order to make it "lightweight".  I can appreciate that, but it seems to me that if this is such a critical component, that to allow a severe known issue to go unfixed for over a year is simply unacceptable.  

Microsoft wasted my time, so I'm here to save yours.  If you experience a similar error to what I did, try the steps outlined above in Section 1 (e.g. do a clean boot, check your TrustedInstaller.exe, etc.).  If those don't work -- you can either call Microsoft's team and invest several more hours, or you can simply do a clean install of Windows 7, which will likely be your final course of action either way.

Alternatively, if you don't absolutely need MSO's fancier features (like collaborative edits, plug-ins, and scripting -- features I unfortunately did need), you can simply save yourself both time AND money, and forgo the pricey Microsoft Office and download the free Open Office 3.3 -- currently supported by the Apache project.

I will update this piece when Microsoft publishes a fix for these .NET Framework 4 corruption issues.