Figured this out myself with Process Monitor.  The problem was that it
was accessing the folder/files through the REMINST share.  Had to go
give the group permissions at the share level.

> _____________________________________________ 
> From:         Mayo, Bill  
> Sent: Tuesday, June 22, 2010 3:16 PM
> To:   'NT System Admin Issues'
> Subject:      Delegate Permissions in WDS
> 
> Anybody have any experience delegating permissions to WDS in Windows
> Server 2008.  I have stood up a new Windows 2008 server with WDS.  I
> followed the instructions in the "Permissions for Common Management
> Tasks" section of
> http://technet.microsoft.com/en-us/library/cc754005(WS.10).aspx to
> give a network group permissions to some basic tasks, including
> "disable an image" and "set properties of an image".  However, when a
> person in this group attempts to do one of these functions, they are
> greeted with an "access is denied" message.  Giving these folks any
> more elevated permissions on the machine or domain is not desirable.
> Any experiences or links would be appreciated.
> 
> Bill Mayo

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