dnvm upgrade fails to unpack runtime with RPC_E_SERVERFAULT on CopyHere

Question

I am trying to install ASP.NET Core for the first time. Installing dnvm with PowerShell works fine, but downloading dnx fail.

When running dnvm upgrade, the process starts out eating a lot of memory (15 GB!) and freezes my computer, the process then fails with the following error message:

Determining latest version
Downloading dnx-clr-win-x86.1.0.0-rc1-update1 from https://www.nuget.org/api/v2
Invoke-Command : Exception calling "CopyHere" with "2" argument(s): "The server threw an exception. (Exception from HRESULT: 0x80010105 (RPC_E_SERVERFAULT))"
At C:\Program Files\Microsoft DNX\Dnvm\dnvm.ps1:1451 char:27
    +             Invoke-Command <<<<  ([ScriptBlock]::Create("dnvm-$cmd $cmdargs"))
    + CategoryInfo          : NotSpecified: (:) [Invoke-Command], MethodInvocationException
    + FullyQualifiedErrorId : ComMethodTargetInvocation,Microsoft.PowerShell.Commands.InvokeCommandCommand

Searching for CopyHere, 0x80010105 and RPC_E_SERVERFAULT all turns up no relevant tips.

I get the same problem with both dnvm upgrade and dnvm upgrade -unstable.