What am I missing here? Thanks.
Nothing, really. As you've already read the other threads you'll have gathered this appears to be a 'bug' in DISM introduced in 1703. You may not have spotted this post that shows using 1703's DISM for an offline repair does complete successfully.
Use DISM to Repair Windows 10 Image
As the offline repair finds no problems on my system, while an online repair fails with 'source not found' I'm assuming there's nothing that actually needs repairing. I'm expecting a fix from Microsoft in (hopefully) the next cumulative update.
You can actually use the .esd file directly, no need to convert to .wim. See the command line in the above post. One point to check in your command line - the index you used. The index :1 is for Pro in my .esd. Check you are using the right one...
Code:
C:\WINDOWS\system32>dism /get-imageinfo /imagefile:d:\x64\sources\install.esd
Deployment Image Servicing and Management tool
Version: 10.0.15063.0
Details for image : d:\x64\sources\install.esd
Index : 1
Name : Windows 10 Pro
Description : Windows 10 Pro
Size : 15,278,163,599 bytes
Index : 2
Name : Windows 10 Home
Description : Windows 10 Home
Size : 15,099,341,449 bytes
Index : 3
Name : Windows 10 Home Single Language
Description : Windows 10 Home Single Language
Size : 15,102,384,056 bytes
Index : 4
Name : Windows 10 Education
Description : Windows 10 Education
Size : 15,096,909,438 bytes
The operation completed successfully.
The installed build is 15063.138 Because the ISO was downloaded just after the 1703 debut, subsequent updates may have upped the build #
suffix. Is that an issue?
Others have reported that on a clean install of 15063.0 (which is what my .iso will install) DISM reports no corruption and an online /restorehealth works. It's only after any updates have been installed that the problem appears, lending credence to the theory that it's an MS-created fault.