I had a similar situation with the automatic upgrade and plug in installation. I contacted my host and explained the problem.
They suggested that WordPress doesn’t like running with PHP in FastCGI mode, which is recommended for Windows servers.
So they took it out of FastCGI mode and when I ran the automatic upgrade again it worked fine. I don’t know what the consequence are of not running FastCGI. I guess I’ll find out.
I thought I’d mention it here as another possible solution.
