wyUpdate tries to do the right thing. And in this case the right thing is to elevate itself because your limited user account does not have permission to read, write, set ACL settings, etc. for the folders specified. wyUpdate detects this and tries to elevate itself.
Because you're forcing wyUpdate to run as a limited user, it's failing (because it obviously doesn't have the necessary permissions).
If you want to allow non-admin updates for your customers then install to a folder that the user has complete control over (e.g. the desktop, the %appdata% folder, the documents folder, etc., etc.). Don't try to frankenstein your limited user account into a fake-admin account -- wyUpdate doesn't allow that (and for good reasons).
Or just install to a "protected" folder (e.g. C:\Program Files\... ) and let wyUpdate ask for elevation.