I'm posting this to hopefully helpout anyone else who might encounter this.
I have a Win2008r2 domain, and my clients decided to stop talking to the WSUS server. All indications were that they were communicating, with some even showing up as having new updates. However, clicking 'Install updates' would result in a "failed to install" and then the box would show new updates ready to install.
My clients could ping the WSUS server, and no firewalls network devices were blocking traffic on 8530 (the WSUS update port). I was stumped as to why the clients were not seeing the new updates that the WSUS server said were pending.