Don't ask me why because there is no reason for it other then it being an M$ product. I have run across this in the past and cleared the problem up by removing a group, or person from the permissions, shut off IIS then turn it back on and re-add the group or person and permissions were restored. Also had this problem with network printers just picked a different IP then put the old IP back. It may have to do with corruption of the JET database because I noticed errors there and the loss of printers or permissions with NT 4.0. Give it a try as well as rebuliding the JET database. I know makes no sense but that's what worked for me.