cpabert never got back to us on this, but we recently had another user report this same issue with a Windows 7 SP1 x86 target computer when trying to use offline mode to patch it. He ended up then trying standard/default/non-caching online mode, and he got this error:
-102: Failed to execute the search. HRESULT: -2147024882
…which translates to:
0x8007000E -2147024882 E_OUTOFMEMORY
He followed the suggestion at this link and installed KB3050265, which resolved the problem. After that he was able to use offline mode successfully to apply the remaining updates to that target computer.