I was having the same issue and found a resolution after some tinkering around...
It appears that when you first install the initial unpacking exe, the default folder location it picks was my computer's original admin account. It was failing because it was trying to access the wrong user folder? It would give me that game installation error torrent popup that the OP posted.
What I did was to uninstall the game entirely, then when I reran the installer exe file, I chose a generic location on my C drive (C:/games/LiFMMO). After doing this, the launcher was able to start downloading the installation.
Hope this helps somebody. Post back if it works for you.