Are you explicitly doing any impersonation of the logon user in custom
actions yourself?

If you are obtaining logon credentials from the user (via dialog or command
line) I would implement a custom action to validate those credentials before
you make any system changes and prevent the install from proceeding until
you have valid credentials.  I would also recommend checking that the
account has the ServiceLogonRight policy set so to ensure it can be used to
run services.

-Mike
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