A fyi in case you hit this error.
The migration process kept getting stuck and demanding that the source server tool had not been run on the source server...but yet it had.
SBS 2008 Migration Error:
Turns out there was issues with the dcom communication:
From the LOG SNIPPET of the first post, seems the installation passed Schema Version, domain/forest level requirements, but it fails at the following point:
 101119.164128.3054: Setup: Caught exception: System.UnauthorizedAccessException: Access is denied. (Exception from HRESULT: 0x80070005 (E_ACCESSDENIED))
This issue can occur if SBS2008 setup fails to make WMI query to the source server to get the OS version. To try to fix the issue, I suggest you do the following:
Make sure DCOM and 'Impersonate a client after authentication' have been configured correctly.
Make sure DCOM is enabled and is working correctly, I understand that you have tried this before, but please double check to ensure it is correct.
1.) Launch Component Services (DCOMCNFG)
2.) Expand Component Services -> Computers -> My Computer
3.) Bring up the Properties dialog box for My Computer
4.) Click on Default Properties tab
5.) Check the box 'Enable Distributed COM on this computer'
6.) Make sure Default Authentication Level is set to 'Connect' and Default Impersonation Level to 'Impersonate'
7.) Click Apply, click Ok.
8.) Close the Component Services window.
Make sure the group policy 'Impersonate a client after authentication' has SERVICE account added to the list.
1.) Launch Local Computer Policy (GPEDIT.msc)
2.) Expand Computer Configuration -> Windows Settings -> Security Settings -> Local Policies -> User Rights Assignment
3.) Make sure the Group Policy 'Impersonate a client after authentication' has Administrators group and SERVICE account added to the list.
4.) Reboot the Source server