That's cleanup previous windows install files*, doesn't cause the discussed problems. Windows Update files cleanup caused the discussed problems. *ps. on the IP vm's it's 22-27GB.
Although that should work, but try to put the "18362.356_amd64_en-us_professional_cd8222e6_convert_virtual" folder on the root of a partition/drive?
Yes, it does appear that the author stopped work on that tool back in May. But, I just used it yesterday and it worked perfectly fine. However, in the future, Microsoft could possibly change something and then the tool would no longer work because it isn't being updated.
OK, I disabled anti virus (to no avail). I then disabled Explorer.exe and it worked. I'm using Win 18362.10019. This is a first for me regarding ISO creation.
You don't need to disable Explorer, just don't open it during the process i cannot control system handles
OK, I disabled the read only feature to the folder. Tried a clean launch without explorer running. It worked. Except, I'm pretty sure that iv'e left explorer running more than once. So I tried again with explorer running and a folder open. Worked like a charm. I'm still not sure but it seems to be a permission issue. Anyways, I get the idea. Thanks for your help abbodi and merci coléoptère.