It's the same issue than described above. Bare Metal Recovery could not be terminated.
I found out that Server Backups works after a server reboot. It works once, and next time fails again. But the first backup after each reboot works.
I am also still an owner of a WHS v1 (Tranquile). I recently bought a new Surface Pro 4 with Windows 10 pro and it won't backup either, not automatic and not manual. I think the automatic one won't even start, no failed backup in the console. If I start manually it says 'the computer failed to take a snapshot of the volume for backup'.
Bummer, is it finally time to replace it with a NAS? And if so, which one? :/
And yeah, the initial downloader is very small. It tend downloads the necessary components, which are GBs in size.
As for the WIn 7 Ultimate system, try this:
I'd been following various links on the ADK topic - I found one for Windows Kits: https://www.microsoft.com/en-us/download/confirmation.aspx?id=34866
It downloads a small downloader app - the app then can download the Windows Kits files which can be put on a flash drive. There is an adksetup.exe on the flash drive that installs on the server.
After installing I have been able to create boot keys for Win7 and Win10 clients. I have a old laptop that I'll test bare metal restores to.
My next challenge is a Win7 Ultimate PC, I've connected 2 Win7 Home Premium clients but I kept having trouble with the one PC and then realized it is Win7 Ultimate and is confused since it supports a domain - I have had it for several years and use it in Homegroup mode. It keeps hanging after I provide the admin credentials when the dashboard is trying to install from the server. I keep winding up with "cannot connect to the server" error.
I did figure out the Media Pack and installed it and validated that media streaming seems to work OK.