Had a issue where some updates where not downloading to WSUS and receiving the following application event error below:
Event ID: 364
Source: Windows Server Update Services
Content file download failed. Reason: The operation being requested was not performed because the user has not logged on to the network. The specified service does not exist. (Exception from HRESULT: 0x800704DD) Source File: /msdownload/update/software/secu/2012/04/windows6.1-kb2690533-x86_9aceb828aa625f63a9eafd56e990b722976e7e23.cab Destination File: c:\Program Files\Update Services\LogFiles\WSusTemp\9ACEB828AA625F63A9EAFD56E990B722976E7E23.cab.
To fix this all I had to change was the Log on As to Network Service for Update Services and then restart the service.