Windows Service Access Denied to Path

I am trying to test an update to a Windows Service and I need for it to read a file on my local drive e.g. C:\testfolder\Schema

I have done everything I can think of to grant rights to this folder for everyone and I continue to get this error.  Error Message -- Access to the path C:\testfolder\Schema.  The service is running as LocalSystem.  My login has Administrator rights.  

Does anyone know what could be wrong.

thanks in advance.
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Adam RayCommented:
Have you gone through the "advanced" file permissions of the file, parent folders(s) and root of C:\? Checking specifically for inheritance, "applies onto" settings, and "deny access" permissions?

You can always take ownership of the top level folder, and apply to all children/objects so you don't have to check everything under C:\testfolder individually.

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käµfm³d 👽Commented:
Is that a file or a directory? Files in Windows normally have extensions.
sherbug1015Author Commented:
I have gone through the "advanced" settings and have taken ownership of the top level folder.  Still getting an access denied.
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