I have a false "Low disk space" warning in my system tray. How do I correct this?

Well I'd start by checking for malware and viruses as they have been known to cause this issue. Malwarebytes is always a good starting point.
There is a registry hack that will disable the warning, but that just might be hiding a symptom of something more sinister.

From Microsoft:

1.Click Start, click Run, type regedit, and then click OK.
2.Locate and then click the following key in the registry:
HKEY_CURRENT_USER\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\Explorer3.On the Edit menu, point to New, and then click DWORD Value.
4.Type NoLowDiskSpaceChecks, and then press ENTER.
5.On the Edit menu, click Modify.
6.Type 1, and then click OK.

Does it say that your C: drive is low on space?

GarethPeart:  Thanks, I am scanning now and will post the results.  I'd prefer not to do the registry hack - I'd like to find the cause and fix.

arnold:  thanks for your reply.  The screenshot of "My Computer" in the pdf shows 87.1GB free on C:.  Is that what you are asking?

It turns out Norton Internet Security was the culprit:

http://community.norton.com/t5/Norton-Internet-Security-Norton/Bug-in-LiveUpdate-causing-incorrect-warning/td-p/161070

The only reason I looked in Norton's direction was after double-clicking the warning icon and reading the title of the following pop-up did I notice the words "Liveupdate warning".

I would not have thought to do this without both arnold's and ogctech's direction, therefore they both get points.

Thanks for all of the replies and assistance.

Thanks to you all for

Yay! Thanks. Glad to be of service.

Di