Harvey Dent and robertpri -
I've run across this situation a number of times (but not many) going back more than 15 years. I have used three methods to remove the offending directory or file:
1) If a file, I use a hex editor to rewrite the corrupt portion of the file, then delete the file
2) If a directory, I use a disk editor to rewrite/remove the directory
Those two methods can be risky and are not for the faint of heart - do a lot of research/reading before trying those methods.
For the past ten years my first go-to tool to fix the problem has been a live (bootable) version of Linux.
1) Write down the exact path to the directory or file in Windows
2) Download and burn a live (bootable) Linux distro to CD - lately I use Puppy Linux 5.2 Lucid (small, fast, very easy to use) or Knoppix Linux (a staple in any sys admin toolbox)
3) Boot to the Linux CD
4) Mount your hard drive (make it available to read-write) - you can do it directly from the desktop in Puppy
5) Open the file manager and navigate to the corrupt file or directory
6) Delete corrupt file / directory
7) Close the file manager windows, remove the Linux CD and reboot to Windows
Problem should be gone.