Think I found the problem using Sysinternal's Process Monitor:
3:32:39.3581954 PM Impulse.exe 5484 QueryOpen C:\ProgramData\Stardock\Impulse\data\public\dem\production\dem.xml FAST IO DISALLOWED
3:32:39.3582445 PM Impulse.exe 5484 CreateFile C:\ProgramData\Stardock\Impulse\data\public\dem\production\dem.xml PATH NOT FOUND Desired Access: Read Attributes, Disposition: Open, Options: Open Reparse Point, Attributes: n/a, ShareMode: Read, Write, Delete, AllocationSize: n/a
C:\ProgramData\Stardock\Impulse\data\public\dem\production\dem.xml does not exist, however I did have a C:\ProgramData\Stardock\Impulse\data\public\dem\beta\dem.xml. I made a copy of \beta\dem.xml to \production\dem.xml and now the installation is progressing again.