VSS not working - Cannot create a stable subkey under a volatile parent key

[ceil32]

I have a Server 2008 R2 Server, when I open Windows Server backup I get the error in the title.

I've ran all the VSS fix tools and removed and reinstalled the Windows Feature but nothing works

When I try and create a new registry key under HKLM\System\Current Control Set\Services\VSS\Diag, I get the error:

Cannot create Key: error writing to the registry

I've given the Admin user full rights on the key along with the NETWORK Service user

Any suggestions?

Thanks