Unfortunately no, nothing else is running and this is being run under an administrator account. I also tried the most recent offline installer with the same result.
I did run Process Monitor and captured the event. I was hunting for "ACCESS DENIED" errors in the log and found the following matching items, which does lead me to think it is some kind of strange permission issue:
"9:55:41.5671076 PM","avast_free_antivirus_setup_offline (1).exe","16532","CreateFile","C:\","ACCESS DENIED","Desired Access: Read Data/List Directory, Synchronize, Disposition: Create, Options: Directory, Synchronous IO Non-Alert, Open Reparse Point, Attributes: N, ShareMode: Read, Write, AllocationSize: 0"
"9:55:41.5679426 PM","avast_free_antivirus_setup_offline (1).exe","16532","CreateFile","C:\","ACCESS DENIED","Desired Access: Read Data/List Directory, Synchronize, Disposition: Create, Options: Directory, Synchronous IO Non-Alert, Open Reparse Point, Attributes: N, ShareMode: Read, Write, AllocationSize: 0"
"9:56:02.1229627 PM","instup.exe","14780","CreateFile","C:\Users\Username\AppData\Local\Temp\_av_iup.tm~a17460\Instup.dll","ACCESS DENIED","Desired Access: Read Data/List Directory, Execute/Traverse, Synchronize, Disposition: Open, Options: Synchronous IO Non-Alert, Non-Directory File, Attributes: n/a, ShareMode: Read, Delete, AllocationSize: n/a"