On a completely newly installed Windows 7 VM (Also Windows Server 2008 R2), Windows Update says “Searching for updates” forever, and SVCHOST is using from 50%-100% CPU, this is fixed in an update, but the machine cannot fetch it, because Windows Update is broken out of the box 🙁
Luckily Microsoft has made and KB article for this (KB3102810), where you can install it manually, and get things updated automatically again 😉