User Home Folder says access denied

I have setup home folders on the network, O: drive for the existing users.  I created another directory on same drive for a new test use, "test".  I used the connect using option, selected "O" and pointed to the location as \\servername\USER$\users\%username%.  It replace %username% with "test" and indicated that the directory already existed and do I want to assign full rights.  I said yes.  

But on the workstation, when I select the O drive, labelled    "test on 'fileserver\USER$\iusers' (O:), it says "O: is not accessible, access denied"  If I go on the server and check effective permissions for the directory, it says I have full rights and the share permissions are read/write.

What is wrong and how do I determine what the issue is?