There is a tool called Process Monitor which is available for free at MS (http://technet.microsoft.com/en-us/sysinternals/bb896645). This is very useful for determining what is really going on.

I've had similar problems before invoking some third-party applications, especially a 32-bit app running on a 64-bit server. The reason is the requests end up going through the WOW64 process, which ends up needing it's own security.

Try setting impersonation within the app.config for an account that has the proper privaledges to access the WOW64 directory, and probably the temp directory.

You also need to watch where it is attempting to create temporary files. The Process Monitor tool can help you there. Since the Vista era, and also I believe Win 2008 maybe as well, apps can't write to their Program Files directory and must use the Program Data directory. I've seen plenty of apps have issues where they try to write a temp file or other file to their own install directory during processing instead of the Program Data directory.

Now, the Process Monitor tool is fantastic, and generates boatloads of information so you will want to turn it on just long enough to capture a possible use of the batch file and it's errors and pause it. There can be 30,000+ operations that are done in a single second so you will need to sort carefully to figure it out.