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After some research I found that using the installer cleanup utility would take care of the problem.
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This utility rarely works for me when I have failed uninstalls. The thing is the MSI could be looking for any number of files that the cleanup utility did not remove (really that just yanks out a few registry entires and doesn't "clean-up" a botched uninstall.
Have you tried this-
http://support.microsoft.com/kb/920660
WSUS Setup uses Microsoft SQL Server to perform the installation, which requires that the user running WSUS setup have administrative authority.
To grant administrative authority to a new user account or new group":
1. Save the following text in Notepad as GrantAdmin.sql:
EXEC sp_grantlogin '<SQL_Server_Name>\<User_Logon_Name>'
Go
EXEC sp_addsrvrolemember '<SQL_Server_Name>\<User_Logon_Name>', 'sysadmin'
Go
NOTE: For an existing user or group, use:
EXEC sp_addsrvrolemember '<SQL_Server_Name>\<User_Logon_Name>', 'sysadmin'
Go
2. Open a CMD.EXE window.
3. Type the following command and press Enter:
osql -E -i C:\<FolderName>\GrantAdmin.sql