Snow Leopard Server - New folder is not inheriting permissions

Calling all Apple Snow Leopard Server Experts.
I see this issue from time to time and it baffles me.
I have a folder that will not inherit permissions. I have tried just about everything ranging from adding admins, applying POSIX and ACL combinations, logging on as different users to name a few.
I create a new folder and the permissions have one group as read-only when it should be read-write.

Can someone tell me what's going on here please.
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OxygenITSolutionsAsked:
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OxygenITSolutionsConnect With a Mentor Author Commented:
Had to add a group with admin permissions to the root level and push down. Was then able to change permissions.
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Britt ThompsonSr. Systems EngineerCommented:
Is this an AFP share or an Windows share?

From the File Sharing editor in Server Admin you need to set the permissions on the root folder then click on the cog wheel drop down to propagate the permissions to the containing folders. If it's a Windows share you need to go to the protocol options and check the option to "inherit permissions from parent"

Also, it helps a great deal if your client machines are using the Mac server as their primary DNS server...especially if the server is using Open Directory. I haven't figured out the reason for that one yet.
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nxnwCommented:
Is this behaviour consistent among documents created by several applications and users?
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OxygenITSolutionsAuthor Commented:
AFP share on an Apple Server. Doesn't happen to all users. just members of a particular group.
DNS remains a mystery. Primary is a Windows Mail server secondary is the Mac Server. Propagating will change existing permissions but new folders don't inherit.
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nxnwCommented:
Is this behaviour consistent among documents created by several applications?
Is this behaviour consistent among documents created by every user in the affected group?
Users who are not in the affected group make new document in the affected folder, and those documents do inherit correctly?
Do be clear, users in the affected group can create documents in the folder, but other members of the group cannot edit them?
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Britt ThompsonSr. Systems EngineerCommented:
Maybe some of the permissions on the sub folders are explicit and are not changing when the root directory changes. Removing and re-adding the users and groups in the permissions on the root folder, create a new directory, propagate, create a new directory and see what happens.
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OxygenITSolutionsAuthor Commented:
Solved myself.
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