Hi Nayab,
Since it's failing in system state. Try to take a NT backup(Windows inbuilt OS backup) for the client. If it's failed then check with Windows admin.
WRN - can't open file: System State:\Automated System Recovery\BCD\BCD (WIN32 -536832991: Unknown error)
10/10/2012 11:06:21 PM - Error bpbrm(pid=7944) from client svaufd02: ERR - Error encountered while attempting to get additional files for System State:\
Are you just backing up system state in that job, the above error have lot of TN for system state issues on ws 2008 client and others but you are getting error 41.
It seems it is just stuck at system state. As you have increased the timeout please enable bpbkar on client and bptm on media sever. Post the output once failed.
Also what OS you are running on Master/Media/Client? Please provide as much infromation you can while posting the issues.
