Thanks for the magical jelly bean key finder software. That is sweet.
I found update KB971033 this way.
Control panel > Programs and Features > over in the left top corner,
View Installed Updates > [Click it and the installed updates will
appear with an option to uninstall] I found it close to the bottom
of the page. I uninstalled it, did a restart and it came up as a
update avail. I chose to hide it as per the post 10 suggested.
I hope you find your problem. I bought a bogus version of W7
Ultimate and didn't know it. After about 4 months I got the same
issue you have. I bought a key from a trusted vendor on eBay
for 80 bucks and it has worked ever since the 1.5 years I've used
it. It is a real pain in the butt, that's for sure.