I recently tried to install WSUS on a Server 2008 R2 box which was to be used for Configuration Manager 2012, but the installation failed with the message: The update could not be found.
The problem was that the server didn't have access to the Internet because it needed a proxy server configured in the Internet Options \ Connections \ LAN tab. Once I put in the proxy server, I tried the installation again. Failed!
The server now has Internet access, but continued to get the same error message.
Solution: I then deleted the Windows Update key in the registry HKLM\Software\Policies\Microsoft\Windows\Windows Update and restarted the Windows Update service.
Once I tried to install the WSUS role again, it was successful.