Software Installation GPO fails inexplicably

I recently created a GPO to assign an MSI package (Adobe Reader 7) with a
transform file to computers. The assignment fails with the following four
messages logged in the Aplication Log:

(1)
Event Type: Information
Event ID: 301
Description:
The assignment of application Adobe Reader 7.0 from policy Deploy - Adobe
Reader succeeded.

(2)
Event Type: Error
Event ID: 102
Description:
The install of application Adobe Reader 7.0 from policy Deploy - Adobe
Reader failed. The error was : This action is only valid for products that
are currently installed.

(3)
Event Type: Information
Event ID: 303
Description:
The removal of the assignment of application Adobe Reader 7.0 from policy
Deploy - Adobe Reader succeeded.

(4)
Event Type: Error
Event ID: 108
Description:
Failed to apply changes to software installation settings. Software changes
could not be applied. A previous log entry with details should exist. The
error was : This action is only valid for products that are currently
installed.

To troubleshoot the problem (thinking there was an error in the .mst file),
I used the commandline to perform a silent installation of the package with
the transform, and to my surprise it succeeded. (The command I executed is:
msiexec.exe /i "Adobe Reader 7.0.msi" TRANSFORMS="acrobat7.mst") However,
subsequent tests deploying the same package via the GPO fail with the above
messages.

Any ideas?

Thanks in advance,
BJ