“Access Denied” to Adobe Reader

I have run into a very strange problem attempting to open a .pdf from a network location. This is a simple file sharing over a peer to peer XP home network. The shared folder is C/Shared folder with full permissions to that folder.
If you try to open a .pdf from another client from that folder it will open. However if the .pdf is in a sub folder of C/Shared folder it returns a message of “There was an error opening this document. Access denied” If you take a copy of a document in a sub folder and place that copy into C/Shared folder it will open.
If you go to the sub folder and turn on full sharing it will still not let you open it and anyway I thought that turning on sharing included the sub folders.
All four computers have Reader 8.1.1 as well as Acrobat Standard 6.0.6. Neither program will open a pdf from a sub folder and the error message is the same. This problem seemed to occur after updating to 8.1.1 on Reader. Reverting to Reader 7 still doesn’t open a document in a sub folder.
When you open a .pdf from the “server” computer and check the properties there is no security on these documents that refuse to open.
I don’t know where to go next. Any ideas would be appreciated!
:confused