Log file - failed MSDE SP4 Installation

setup /upgradesp sqlrun DISABLENETWORKPROTOCOLS=0 /L*v C:\MSDELog.log

The log files indicates;
1] SOFTWARE\Microsoft\Microsoft SQL Server Setup.{E09B48B5-E141-427A-AB0C-D3605127224A}
TempFolder is C:\DOCUME~1\thp-mgb\LOCALS~1\Temp\{E09B48B5-E141-427A-AB0C-D3605127224A}\
Loading extended custom action library C:\DOCUME~1\thp-mgb\LOCALS~1\Temp\{E09B48B5-E141-427A-AB0C-D3605127224A}\sqlcax.dll
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{E09B48B5-E141-427A-AB0C-D3605127224A}
Attempting to change the service (MSSQLSERVER) path to : C:\mssql7\Binn\sqlservr.exe -sMSSQLSERVER
MSI (s) (F8:30) [14:32:27:328]: Executing op: ActionStart(Name=InstallPerfMon.2D02443E_7002_4C0B_ABC9_EAB2C064397B,,)
MSI (s) (F8:30) [14:32:27:328]: Executing op: CustomActionSchedule(Action=InstallPerfMon.2D02443E_7002_4C0B_ABC9_EAB2C064397B,ActionType=1025,Source=BinaryData,Target=InstallPerfMon,)
MSI (s) (F8:D4) [14:32:27:328]: Invoking remote custom action. DLL: C:\WINNT\Installer\MSI313.tmp, Entrypoint: InstallPerfMon
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{E09B48B5-E141-427A-AB0C-D3605127224A}
TempFolder is C:\DOCUME~1\thp-mgb\LOCALS~1\Temp\{E09B48B5-E141-427A-AB0C-D3605127224A}\
Loading extended custom action library C:\DOCUME~1\thp-mgb\LOCALS~1\Temp\{E09B48B5-E141-427A-AB0C-D3605127224A}\sqlcax.dll
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{E09B48B5-E141-427A-AB0C-D3605127224A}
Starting custom action InstallPerfMon
Registering performance counters from sqlctr.ini
PerfmonLoad routine returned error code 267
Action ended 14:32:27: InstallFinalize. Return value 3.


2] MSI (s) (F8:30) [14:32:38:656]: Executing op: ActionStart(Name=RollbackDeferProperties.2D02443E_7002_4C0B_ABC9_EAB2C064397B,,)
MSI (s) (F8:30) [14:32:38:656]: Executing op: CustomActionRollback(Action=RollbackDeferProperties.2D02443E_7002_4C0B_ABC9_EAB2C064397B,ActionType=1281,Source=BinaryData,Target=DeferProperties,)
MSI (s) (F8:68) [14:32:38:656]: Invoking remote custom action. DLL: C:\WINNT\Installer\MSI316.tmp, Entrypoint: DeferProperties
SOFTWARE\Microsoft\Microsoft SQL Server Setup.{E09B48B5-E141-427A-AB0C-D3605127224A}
Start custom action DeferProperties
Defer Properties returns: 0
MSI (s) (F8:30) [14:32:38:796]: Executing op: End(Checksum=0,ProgressTotalHDWord=0,ProgressTotalLDWord=0)
MSI (s) (F8:30) [14:32:38:796]: Error in rollback skipped.	Return: 5
MSI (s) (F8:30) [14:32:38:796]: Unlocking Server
MSI (s) (F8:30) [14:32:38:812]: PROPERTY CHANGE: Deleting UpdateStarted property. Its current value is '1'.
Action ended 14:32:38: INSTALL. Return value 3.


3] Property(S): OutOfDiskSpace = 0
Property(S): OutOfNoRbDiskSpace = 0
Property(S): PrimaryVolumeSpaceAvailable = 0
Property(S): PrimaryVolumeSpaceRequired = 0
Property(S): PrimaryVolumeSpaceRemaining = 0
Property(S): SqlFeature = SqlRun
Property(S): SOURCEDIR = C:\Documents and Settings\thp-mgb\Desktop\MSDE Patch\patch files\MSDE\Setup\
Property(S): SourcedirProduct = {E09B48B5-E141-427A-AB0C-D3605127224A}
MSI (s) (F8:30) [14:32:38:984]: MainEngineThread is returning 1603
MSI (s) (F8:2C) [14:32:39:000]: Destroying RemoteAPI object.
MSI (s) (F8:68) [14:32:39:000]: Custom Action Manager thread ending.
MSI (c) (24:FC) [14:32:39:046]: Back from server. Return value: 1603
MSI (c) (24:FC) [14:32:39:046]: Decrementing counter to disable shutdown. If counter >= 0, shutdown will be denied. Counter after decrement: -1
Action ended 14:32:39: INSTALL. Return value 3.


and finally
MSI (c) (24:FC) [14:32:39:078]: Note: 1: 1729 
MSI (c) (24:FC) [14:32:39:078]: Product: Microsoft SQL Server Desktop Engine -- Configuration failed.

MSI (c) (24:FC) [14:32:39:078]: Grabbed execution mutex.
MSI (c) (24:FC) [14:32:39:078]: Cleaning up uninstalled install packages, if any exist
MSI (c) (24:FC) [14:32:39:078]: MainEngineThread is returning 1603


Please suggest me whats wrong with the installation.

Regards,
Parveen