Hi jagguy,
Please kindly post the whole error message. From your description, I can understand that you encounter permission issue, but when do you encounter it? It’s occurred when create a web application or debug the web application?
If this issue occurred when creating a web application, please ensure to login Windows with the Administrative account. If the current Windows account is not in the Administrators group, please refer to the following link:
Developing Software in Visual Studio .NET with Non-Administrative Privileges
http://msdn2.microsoft.com/en-us/library/aa289173.aspx
If the issue coccurred when debug web application, please refer to the following link.
You may receive an "Access is denied" error message when you try to debug a Web application in Visual Studio .NET, and you have administrative permissions
http://support.microsoft.com/kb/894433