It is nice to hear that you could resolve the folder and file permissions problem under your My Documents. I think the main culprit is the missing SYSTEM account.

By default, the SYSTEM account is granted full control to all files on an NTFS volume. Here the SYSTEM account has the same functional privileges as the administrator account.

The SYSTEM account is used by the operating system and by services that run under Windows. There are many services and processes within Windows that need the capability to log on internally and they use the SYSYEM account for this purpose.

Without the SYSTEM account in the file/folder permissions, The OS could not perform certain tasks on the files. That is why windows was giving an error when you try to rotate an image in these folders.