i found a workable solution (at least until i find it doesn't work). its entirely possible that i have messed up my system but right now i have a working ghost and i have manually done several backups. i've been able to reboot multiple times.
the essence of the problem is that some microsoft runtime might be missing (based on my ability to run ghost right up to that point where i made the fateful choice to run liveupdate).
i went to the microsoft site and downloaded every possible combination of c++ runtime redistributables for x86 and x64. since they are named almost identically, on the download i renamed them based on their pedigree so i ended up with:
vcredist_x64.2005.exe
vcredist_x64.2005.sp1.exe
vcredist_x64.2008.sp1.exe
vcredist_x86.2005.exe
vcredist_x86.2005.sp1.exe
vcredist_x86.2008.exe
vcredist_x86.2008.sp1.exe
(while typing this out i realized that i missed vcredist_x64.2008.exe, but it doesn't appear to have impacted anything)
i installed them chronologically (2005, sp, 2008, sp)
i then ran the ghost installer. it takes a long time and a utility that i have (winpatrol) warns me that i have a new startup program for ghost before i get the 1935 error box. this time instead of letting it rollback, i used the sysinternals process explorer and killed the msi installer service tree, and then the ghost installer service tree.
this creates a suspended installation with what appears to be a working ghost. i then started the ghost service, the ghost tray, and the ghost program, registered my product and everything was working.
what i didn't know the 1st time is that msi installer remembers suspended installations and the next time it ran it deleted ghost via the rollback action.
i then reinstalled, did a whole bunch of searching and found out that there are several registry keys that facilitate this. i tried using the windows installer cleanup program msicuu2.exe but it needs to get installed and when you do that it deletes the suspended ghost.
i then reinstalled one more time and with the usual caveats that mistakes made with regedit can destroy life as we know went to:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Installer
i found two keys that i deleted. one called InProgress, the other called Rollback. I had found several references about InProgress and did rollback because it pointed to a temp file and getting rolledback was what was killing ghost.
having done this i was able to install the microsoft cleanup utitlity without a complaint and ghost still works.
so, what this is a total hack but right now it appears to be working for me. now i can wait for ghost 15 and still have a backup solution. all the usual warnings apply if you use this to find your own solution.