The steps you have followed sound correct, and the error still looks like it is related to some restriction / policy that is being applied.
What I can suggest you is to try to run the application on another machine ( if possible use similar configuration ), but our tests here show that you should not be getting such errors, while installing the application as administrator.
Also on a side note, can you tell us when do you get the error - when starting the setup process or at some point during installation?
All the best,
the Telerik team
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