Volume Shadow Copy Service error: Failed resolving account ACCOUNTNAME with status 1376. Check connection to domain controller and VssAccessControl registry key.
Gather writers' status
Executing Asynchronous Operation
Current State: GatherWriterStatus
Error: NetLocalGroupGetMemebers(ACCOUNTNAME), 0x80070560, The specified local group does not exist.
Somehow the ACCOUNTNAME was set in the registry under:
Removing it and leaving only the "NT Authority\NetworkService" account in there resolved the issue.
This solution by anonymous is recommended for 2K8 server not 2K11.
For 2K11 it seems to resort back to finishing the 2nd part when patching SharePoint.