Hi,
Here is the solution we got from MS and it worked.
On SUP server:
++Opened command prompt as an admin browse to C:\Program Files\Update Services\WebServices\ClientWebService and run below commands.
•takeown /f web.config /a
•icacls web.config /grant administrators:f
•notepad Web.config
Changed below values-
•maxCachedUpdatesvalue to 44000
•maxInstalledPrerequisites to 800
•maxRequestlength from 4096 to 8192
Ensured below values are right- setting for WSUS App pool
•Changed “Queue Length” from 1000 to 4000
•Chnaged "Service Unavailable Response Typr" from the default HttpLevel to TcpLevel
•Changed “Failure Interval (minutes)” from Default 5 to 30
•Chnaged "Maximum Failures" from the default 5 to 60