External hard drive directly connected to computer used for wsusoffline.
Well, let me update this post, I am able to get past this error on a different computer and also using some VM"s (same LAN) - so, am thinking it is a firewall or possible router issue (I'm looking into that side of it), but it doesn't complete the download on
any other machine, as it gets stuck at this point:

which is also noted in this thread:
viewtopic.php?f=3&t=4958I'll keep this thread updated to see if original problem is either my own network or if it was a random error.
EDIT: OK, this thread is
SOLVED - or at least the original problem is.
It was a bad local machine Outbound firewall rule. Apologies for any lost time you guys had looking into this. cheers.