Replying my own question in case someone is interested:
It was another issue caused by improper Windows policy. The Windows policy enforced a value for the system TEMP variable, and this was incorrect with computers that does not have a drive indicated by the variable value. Our variable had a value of D:\TEMP and the computer on which it was enforced had only C: drive. D: drive was the CD-ROM drive.
Incorrect TEMP variable values can cause other issues in other areas such as DAT update, and tend not to catch the eye instantly when troubleshooting.
That's a great piece of information, thanks