LimitAccess prevents DISM from accessing the Microsoft web pages (or other Internet resources) during the search for repair/replacement files. If it works when you don't include LimitAccess, that means it was able to find the files it needs online even if it can't find them on your PC. FYI, the proper syntax for ESD is a little different from that for WIM in the /source attribute, namely:
DISM ... /source:ESD:R:\sources\install.esd:1
Of course, you'll need to replace the italic text above (R:\sources\install.) with the correct path and filename for the ESD file to which you'd like to point.
PS: You may find these two blog posts of mine interesting in this connection
Simple Trick Fixes DISM /source syntax issues - The Network Hub
Another Worthwhile DISM Source "Trick" - The Network Hub