DISM Error

I upgraded WAIK to ADK and trying to install Windows 8 with MDT.

After Apply OS i am getting an error when DISM is trying to apply and xml file.

Here is a DISM log file:

2013-09-16 13:48:36, Info                  DISM   DISM WIM Provider: PID=2412 TID=2416 [C:\] is not a WIM mount point. - CWimMountedImageInfo::Initialize
2013-09-16 13:48:36, Info                  DISM   DISM Imaging Provider: PID=2412 TID=2416 The provider WimManager does not support CreateDismImage on C:\ - CGenericImagingManager::CreateDismImage
2013-09-16 13:48:36, Info                  DISM   DISM Imaging Provider: PID=2412 TID=2416 No imaging provider supported CreateDismImage for this path - CGenericImagingManager::CreateDismImage
2013-09-16 13:48:36, Info                  DISM   DISM Manager: PID=2412 TID=2416 physical location path: C:\ - CDISMManager::CreateImageSession
2013-09-16 13:48:36, Info                  DISM   DISM Manager: PID=2412 TID=2416 Copying DISM from "C:\Windows\SysWOW64\dism" - CDISMManager::CreateImageSessionFromLocation
2013-09-16 13:49:39, Error                 DISM   DismHostLib: Failed to create DismHostManager remote object. Checking for dismhost.exe exit code.
2013-09-16 13:49:39, Info                  DISM   DismHostLib: Found dismhost.exe exit code.
2013-09-16 13:49:39, Error                 DISM   DISM Manager: PID=2412 TID=2416 Failed to create Dism Image Session in host. - CDISMManager::LoadRemoteImageSession(hr:0xc0000135)
2013-09-16 13:49:39, Warning               DISM   DISM Manager: PID=2412 TID=2416 A problem ocurred loading the image session. Retrying...  - CDISMManager::CreateImageSession(hr:0xc0000135)
2013-09-16 13:49:39, Info                  DISM   DISM Manager: PID=2412 TID=2416 Copying DISM from "C:\Windows\SysWOW64\dism" - CDISMManager::CreateImageSessionFromLocation
2013-09-16 13:50:40, Error                 DISM   DismHostLib: Failed to create DismHostManager remote object. Checking for dismhost.exe exit code.
2013-09-16 13:50:40, Info                  DISM   DismHostLib: Found dismhost.exe exit code.
2013-09-16 13:50:40, Error                 DISM   DISM Manager: PID=2412 TID=2416 Failed to create Dism Image Session in host. - CDISMManager::LoadRemoteImageSession(hr:0xc0000135)
2013-09-16 13:50:40, Error                 DISM   DISM Manager: PID=2412 TID=2416 Failed to load the image session from the temporary location: C:\MININT\Scratch\2184815F-7DB1-480F-A734-C8D2E533DF42 - CDISMManager::CreateImageSession(hr:0xc0000135)
2013-09-16 13:50:40, Error                 DISM   DISM.EXE: Could not load the image session. HRESULT=C0000135
2013-09-16 13:50:40, Error                 DISM   DISM.EXE: Unable to start the servicing process for the image at 'C:\'. HRESULT=C0000135
2013-09-16 13:50:40, Info                  DISM   DISM.EXE: Image session has been closed. Reboot required=no.

And BDD.log file:

Copied unattend.xml to C:\Windows\Panther for image apply.LTIApply9/16/2013 1:48:36 PM0 (0x0000)
About to run command: dism.exe /Image:C:\ /Apply-Unattend:C:\Windows\Panther\Unattend.xml /ScratchDir:C:\MININT\ScratchLTIApply9/16/2013 1:48:36 PM0 (0x0000)
Command has been started (process ID 2412)LTIApply9/16/2013 1:48:36 PM0 (0x0000)
  Console > Deployment Image Servicing and Management toolLTIApply9/16/2013 1:48:37 PM0 (0x0000)
  Console > Version: 6.2.9200.16384 LTIApply9/16/2013 1:48:37 PM0 (0x0000)
  Console > Error: 0xc0000135LTIApply9/16/2013 1:50:40 PM0 (0x0000)
  Console > An error occurred while attempting to start the servicing process for the image located at C:\.LTIApply 9/16/2013 1:50:40 PM0 (0x0000)
  Console > For more information, review the log file.LTIApply9/16/2013 1:50:40 PM0 (0x0000)
  Console > The DISM log file can be found at X:\windows\Logs\DISM\dism.logLTIApply9/16/2013 1:50:40 PM0 (0x0000)
Return code from command = -1073741515LTIApply9/16/2013 1:50:40 PM0 (0x0000)
FAILURE ( 5627 ): -1073741515  0xC0000135: Run DISM.exeLTIApply9/16/2013 1:50:40 PM0 (0x0000)
Event 41002 sent: FAILURE ( 5627 ): -1073741515  0xC0000135: Run DISM.exeLTIApply9/16/2013 1:50:41 PM0 (0x0000)
Command completed, return code = -2147467259 LiteTouch9/16/2013 1:50:41 PM0 (0x0000)
Litetouch deployment failed, Return Code = -2147467259  0x80004005LiteTouch9/16/2013 1:50:41 PM0 (0x0000)
Event 41014 sent: Litetouch deployment failed, Return Code = -2147467259  0x80004005LiteTouch9/16/2013 1:50:41 PM0 (0x0000)
For more information, consult the task sequencer log ...\SMSTS.LOG.LiteTouch9/16/2013 1:50:41 PM0 (0x0000)

I am not sure why DISM is failing?

Thanks for any help.