Windows 7 64-bit, with both Python3.4 and Python2.7 installed at some point :)
I'm using Py.exe to route to Py2 or Py3 depending on the script's needs - but I previously improperly uninstalled Python27 before.
Py27 was removed manually from C:\python\Python27 (the folder Python27 was deleted by me previously)
Upon re-installing Python27, it gave the above error you specify.
It would always back out while trying to 'remove shortcuts' during the installation process.
I placed a copy of Python27 back in that original folder, at C:\Python\Python27, and re-ran the same failing Python27 installer. It was happy locating those items and removing them, and proceeded with the install.
This is not the answer that addresses registry key issues (others mention that) but it is somewhat of a workaround if you know of previous installations that were improperly removed.
You could have some insight to this by opening "regedit" and searching for "Python27" - a registry key appeared in my command-shell Cache pointing at c:\python\python27\ (which had been removed and was not present when searching in the registry upon finding it).
That may help point to previously improperly removed installations.
Good luck!