Joe,
Where, in your directory structure, have you put the folder? I, too, have had this problem. I solved it, amlost accidently, by moving the folder out of the directory that was being served.
I think that it has something to do with the way that NT (WIN2K) and IIS operate. Similar to the locking of directories!
So all I can suggest is to move it out of your web site directory, if it is in there!
HTH