Can't delete folder - access denied (despite attempts to fix)

Wild stab in the dark but have you tried removing it via the command line in Safe Mode using the Administrators account?

I tried just now from the "Administrator:Command Prompt" in normal mode and got "Access is denied". I'll try again in Safe mode next time I reboot.

Safe mode command line delete didn't work either. It went through all the files saying "Delete", but at the end said "Access denied" and the directory & its files are still there.

Pulled this from one of the microsoft sites

Step 1: Take ownership of the root drive:
Method 1: Take ownership of the drive from user interface.

1. Right click on drive and select “Properties” from Context Menu.

2. Click on "Security" tab.

3. Click on “Advanced” button.

4. Now click on "Owner" tab in Advanced Security Settings for User windows.
5. Click on Edit Button and select user from given Change Owner to list if user or group is not in given list.
6. Click on other users or groups. Enter name of user/group and click ok.
7. Now select User/group and click apply and ok. Check “Replace owner on subcontainers and objects” if you have files and folder within selected folder.
8. Click ok when Windows Security Prompt is displayed.
9. Now Owner name must have changed.
10. Now click Ok to exist from Properties windows.

11. Once you have taken the ownership of file or folder next part comes is granting permissions to that file/folder or object.
If the above method doesn’t work, you could try taking ownership from the command line.
Method 2: Taking ownership of a folder from command line
Open an elevated Command Prompt window.
To do so:

1. Go to > Start > All Programs > Accessories
2. Right-click on Command Prompt, and then click Run as Administrator.
3. Type the following command and press ENTER:

takeown /f <foldername> /r /d y

4. To assign the Administrators group Full Control Permissions for the folder, use this syntax:

icacls <foldername> /grant administrators:F /T
The /T parameter is added so that the operation is carried out through all the sub-directories and files within that folder.

5. To know more information about the above commands, run these commands from a Command Prompt window.
takeown /?
icacls /?
Once you take ownership, you can grant permissions on those folders.
Step 2: How to Grant Permissions in Windows
1. Locate the drive on which you want to take ownership in windows explorer
2. Right click on drive and select “Properties” from Context Menu
3. Click on Edit button in Properties windows Click ok to confirm the prompt.
4. Select user/group from permission windows or click “add” to add other user or group.
2. Now under Permission section check the rights which you want to grant i.e check “Full
3. Control” under the “Allow” column to assign full access rights control permissions to Administrators group.
4. Click Ok for changes to take effect and click ok to exit from Properties window.
For more information, refer:

What are permissions?
http://windows.microsoft.com/en-us/Windows7/What-are-permissions
This should help you in copying the file in System32 folder.

I'd actually tried this before (see my first post), and whenever I clicked "Replace all child object permissions with inheritable permissions from this object" the check mark would disappear when I checked drive Properties again. This time - for reasons I have no idea about - it didn't disappear and instead Windows Security went through a *long* procedure of setting security information for apparently every file on the disk. When I again tried to delete the directory, I got a screen saying "Preparing to recycle" and "Calculating". This went on for several minutes, at which point I clicked "Cancel". "Canceling" went on for several more minutes until I uncovered a dialog box saying the recycle bin was corrupted. I chose to delete the recycle bin at which point the Canceling finished. Finally I used FileMenu Tools to delete the directory bypassing the recycle bin. This time it worked!

So thanks for the information. The problem is solved, though I must say I'm no more enlightened as to why it occurred than I was before.

Thanks again.