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I am having the same problem on a customers machine. I found that if you start windows in safe mode the device manager works like it is supposed to, you can also set permissions in the registry without getting the error, but when you start again in regular mode the device manager is blank again. I decided to try a repair install over the existing windows and now I am stuck when it tries to install devices, it just hangs there. The install logs show the error as "setup encountered an error while trying to set system security". I am still battling this and I will post if I get it solved, and I will also be watching this thread for other suggestions.
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