[Blogging this because we’ve hit this a few times at work in the past 3 months]
If all attempts for installing AppFabric v1.1 fail with the ever helpful 1603, look in your %TEMP%\AppServerSetup1_1_CustomActions(datestring).log file [where datestring is the last time you invoked the installer]. You may see a message like this:
6/23/2014 11:32:45 AM EXEPATH=C:\Windows\system32\\net.exe PARAMS=localgroup AS_Observers /comment:"Members of this group can observe AppFabric." /add LOGFILE=C:\Users\me\AppData\Local\Temp\AppServerSetup1_1_CustomActions(2014-06-23 11-32-31).log Error: System error 1379 has occurred. Error: The specified local group already exists. ExitCode=2
Answer: Visit this StackOverflow answer: http://stackoverflow.com/questions/16655899/appfabric-installation-error-code-1603. Basically, blow away the AS_Observers and AS_Administrators local groups. Then try to run the installer again.
Then go grab some ice and Tylenol. That past hour of slamming your head on your desk probably left a bruise.
Nithin's Blog 