Caused by Folder Lock 6
I can confirm that, as others have stated already, if you have Folder Locker 6 there is a good chance that it is causing the problem. I have been searching all day for a fix to this issue, reinstalling drivers and using system restore points, until I stumbled across this thread. Not only did uninstalling Folder Locker solve the "no files left" error, but it also solved an issue where ATI Catalyst Control Centre would not initiate.