Event ID 7000 : not a valid Win32 application during WSUS installation on SCCM 2012 SP1

Issue
Today after installing another fancy Windows 2012 SCCM Server I noticed that when I tried to configure WSUS and WDS the service crashed with the following error:
The WSUS Service failed to start due the following error: WSUS Service is not a valid Win32 application.
Event ID 7000.

Reason:
About a hour ago I also had an error on File Name Warning:
There is a file or folder on your computer called “C:\program” which could cause certain applications to not function correctly. Renaming it to “C:\program2” would solve this issue.
program error
I made a note of it but did not rename it because the message wasn’t wrong, there IS a file called program (no extension) on my Systemdrive. But why?
program
After a deep dive in my server configuration I discovered the distmgr.log of ConfigMgr is missing quotations while saving the log file. This could be an solution; after some more digging It looks like if the “” (quotation marks) were missing in the command line for the logfile path. Windows would then go and interpret the logfile as “C:Program”.

Program2
So this looks like a bug in the installation of the SCCM 2012 Distribution Manager installation.
To be sure I opened the program file with notepad and noticed that it’s indeed a text file.
program3

Resolution:
Rename or delete the c:\program file and the issue is solved.