I have another suggestion that worked for me, however, you need to be familiar with the Windows Registry. I have followed these steps successfully:
1. Uninstall the Zune software from Add/Remove Programs. (For those of you having trouble uninstalling the software start with step 2 below, however, you must come back to step 1 and start the process over to ensure that all files and entries are gone).
2. Search the Windows Registry for "Zune" and delete ALL entries found. (There are a couple that you will not be able to remove and this is okay).
3. Search the hard drive for "Zune" and delete ALL files/folders found.
4. Restart the computer.
5. Run the Zune setup software. (Does not matter if you try the old installer or the new installer).
If you need further assistance feel free to contact me.