IIS7 Issue after Activating Server 2008

I have a Windows 2008 Server with the latest IIS and FTP (7.5?) And latest updates.

I spent A LONG TIME setting up FTP Over SSL and purchased a certificate for many years.  

I just recently activated Server 2008 (I thought it was already activated) and FTPS crapped out.  I get the following error.  

certificate is accepted
username and password is accepted
530 User cannot log in, home directory inaccessible.
Error:      Critical error
Error:      Could not connect to server

I know for 100% certainty that it is Windows Activation.  This server is in a VM and I have a snapshot of when the FTPS was working.  I did the following:

Revert to working snapshot
test FTPS (works fine)
Activate windows
test FTPS (error)
repeat
repeat
repeat

I have absolutely no idea what to do.  Any help would be appreciated.  
mirchevskyAsked:
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Steve BinkCommented:
>>> 530 User cannot log in, home directory inaccessible.

Have you gone back and checked the NTFS permissions for the site's root?  Have you tried recreating the site in IIS?
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