HKLM\SOFTWARE\Wow6432Node\Microsoft\DevDiv\VS\Servicing\9.0\IDE\1033
In that key I noticed the suspicious values:
"SP"=dword:00000000 "SPIndex"=dword:00000000 "SPName"="RTM"
Without quitting the SQL server installer validaton screen, I changed these values to what you see below, crossed my fingers and rerun the installer validation, which passed!
"SP"=dword:00000001 "SPIndex"=dword:00000001 "SPName"="SP1"