Nope sound like something different...Hmmm.
It is rare but I have seen this kind of thing happen for a couple of reasons.
1. %TEMP% does not resolve from a command line.
2. HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders\ AppData and/or LocalAppData values gets corrupted
3. One of the properties in the MSI has a typo or cannot be resolved by the system.
FileMon or Regmon might be able to help you troubleshoot this a little easier.
Hope this helps, however I doubt I just made your day any easier. 😉