Came across this tool/tip that may come in handy if ever working on a permissions problem.
Fortunately one of the customers who had this problem contacted us with a solution that worked for them, and I wanted to list it here in case others run into this same problem in the future. Here are the steps to follow to repair permissions to workaround this issue:
1. Download the SubInACL tool from this MS Site and install it. By default it will install to c:\Program Files\Windows Resource Kits\Tools
2. Go to the Start menu, choose Run and type cmd
3. Type cd /d %ProgramFiles%\Windows Resource Kits\Tools to change directories to the folder that SubInACL is installed to
4. Type notepad reset.cmd and press yes to create a new file named reset.cmd in c:\Program Files\Windows Resource Kits\Tools
5. Copy and paste the following contents into reset.cmd and then save and close it (or download it from here and rename it from reset.cmd.txt to reset.cmd):
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=administrators=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=administrators=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=administrators=f
subinacl /subdirectories %SystemDrive% /grant=administrators=f
subinacl /subkeyreg HKEY_LOCAL_MACHINE /grant=system=f
subinacl /subkeyreg HKEY_CURRENT_USER /grant=system=f
subinacl /subkeyreg HKEY_CLASSES_ROOT /grant=system=f
subinacl /subdirectories %SystemDrive% /grant=system=f
6. Type reset.cmd and press enter to run the SubInACL tool (you will need to have adminstrator privileges for this to run correctly). This tool will take several minutes to run