Once again I have found my self in a situation where a customer had problems with a task Sequence stopping, so now it’s time to do a post about this well known situation
You might see your Task Sequence stopping with the following error in smsts.log:
Failed to set log directory. Some execution history may be lost. The system cannot find the file specified. (Error: 80070002; Source: Windows)
The problem is well documented in the support case here : KB2894518
If a Microsoft System Center Configuration Manager task sequence that uses the "Install Software Updates" step installs a software update that triggers multiple restarts after the task sequence successfully runs the Install Software Updates task, the task sequence can fail.
The first restart that is initiated by the software update is controlled by the task sequence. However, the second restart request is initiated by a Windows component (typically, Component-Based Servicing) and therefore is not controlled by the task sequence. Because the second restart is not controlled by the task sequence, the task sequence execution state is not saved before the restart. When the task sequence resumes after the second restart, no state is available to continue successfully.
Unfortunately the support case is not updated the moment an update requiring multiple restarts are released, so note this issue so that you know what's going on the next time you see this error.