Okay this is bizarre. I just DCPROMO'd this server at home to set it up with AD. Upon reboot, I tried to get into the DNS server and it says "Access Denied". Okay so let's try that again.
I remove the role, reboot, and go to install the role again. Now, when I check the box to install the DNS server, the MMC thing crashes immediately! Here's the error I'm getting..
Description: Stopped working
Problem signature: Problem Event Name: CLR20r3 Problem Signature 01: mmc.exe Problem Signature 02: 6.1.7600.16385 Problem Signature 03: 4a5bc808 Problem Signature 04: mscorlib Problem Signature 05: 2.0.0.0 Problem Signature 06: 4d4cbca7 Problem Signature 07: 4212 Problem Signature 08: a9 Problem Signature 09: System.NullReferenceException OS Version: 6.1.7600.2.0.0.272.7 Locale ID: 1033
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Personally I would try installing SP1 for Windows Server 2008 R2 as it does not appear to be installed. If the process still crashes you can troubleshoot the cause then.
I would also try installing the role through dism. Some server core specific examples are at http://technet.microsoft.com/en-us/library/ee441260(WS.10).aspx. But you can adopt it for full installations. Just got to get the name right. Use /get-features to get the name and then install it.