Thanks Frank, unfortunately I don't even have a C:WindowsInstaller folder... I downloaded the SP3 file and saved it to C:Data... which is a share I created to store all our data. So then I had to navigate to that folder, ran the file (which is basically just an extractor), then ran the setup.exe which appeared after extraction was complete. In the same folder I could see other files and folders, including the exchangeserver.msi that it reportedly couldn't find.
You would think two things would have happened - first upon running setup.exe, it would check for all files to be in place before beginning the upgrade, and secondly if it failed to find a specific file, to give me a dialog box that lets me find it for the upgrade to continue! Instead it just fails after already stopping and disabling services, removing files and getting everything prepped and ready for the install.
I will have to do some more research on your suggestions, thanks.