84B20001 - Failed to install security update for SQL Server 2012 on Windows 8 (64-bit)

I am having problem to install security update for SQL Server 2012 (64-bit) on Windows 8 (64-bit) OS.

I got error code 84B20001 while installation. After further investigation, in event log I found message as below-

"FileMgr::StartLogFiles: Operating system error 2(The system cannot find the file specified) occurred while creating or opening file 'e:\sql10_main_t\sql\mkmastr\databases\objfre\i386\MSDBLog.ldf' Diagnose and correct the operating system error, and retry the operation."

1. I have not installed SQL Server on this location, I gone through recommended steps for installation.
2. I have tried all the possible solutions found on web (including RebuildDatabase also), but nothing seemed to work.
3. I have checked all permissions to access the database and those are all enough.
4. I have more than 100GB space on C:, D: and E: drive, hence less disk space issue shouldn't come.
5. Also, I failed to start SQL Express service from service manager (SQL Server Configuration).
6. Under "%systemroot%\SoftwareDistribution\" directory in the log file, I found message as below-

"AutomaticUpdates Failure Content Install Installation Failure: Windows failed to install the following update with error 0x80070643: Security Update for SQL Server 2012 RTM (KB27164442)."

Appreciate the help.

Thanks,

Amol