> It definitely has the permissions because I ran it as an 
> administrator. I
> tried as local system as well - both have full access granted for this
> folder (as a matter of fact - for every folder on my development 
> machine).

Applications running in the service window do not get the same rights 
as logged-on users, in particular mapped network drives are not 
available, you have to use full UNC paths.  


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