Schema State check has failed. 

Both instances were linked back to DNS.

To prove that AD was healthy I ran the Prepare AD components directly from the DC (that works as usual)..which confirms that a DNS validation issue is present.
So what’s going on with DNS?

Fisrtly an NSLOOKUP on the Lync box reveals that the default DNS server is unknown, adding a PTR record for the DNS server solves that.

Secondly, the installer queries the SRV records for contacting the PDC in active directory. This SRV record is: 
_ldap._tcp.pdc._msdcs. DnsDomainName