Based on the symptom and looking at the log files, I found that we might have installed a bad hotfix baseliner contained in KB952883, which causes the subsequent updates (including 983583) to fail. This issue can be fixed by installing the hotfix KB975954. Please follow the steps mentioned below:

1. Based on your OS Install one of these patches

http://code.msdn.microsoft.com/KB975954/Release/ProjectReleases.aspx?ReleaseId=3839

 

2. Install the fix http://go.microsoft.com/?linkid=9737836

Once you complete the above steps, reboot the system and try checking the Windows update.