I have found a new and apparantly unknown solution to this problem. I'm not really expecting any replies to this message, but I'm posting this here so that others who experience this error can perhaps (finally) fix it themselves. , I have a new 2008 R2 file server I only just built a week ago, and for some reason I am getting a bizarre error at server startup that says the "Diagnostic Policy Service" failed to start, due to an "Access Denied" error #5. The only official Microsoft reference to this error is a registry permissions article on TechNet, but these permissions are correct on my server: http://support.microsoft.com/kb/943996 , After spending a great deal of time wading through tons of unhelpful discussions of the problem I decided to try researching it myself. I downloaded and installed Microsoft's free "Process Monitor" utility, started it, stopped the monitoring, and cleared the log. Next I arranged the services window and the Process Monitor utility window so that I could quickly start the capture of events, click Start on the "Diagnostic Policy Service" and then quickly stop capturing events after the error occured. Searching the Process Monitor event log for the word "denied", I found this single entry: ============== Date & Time: 9/3/2011 7:05:39 AM Event Class: File System Operation: CreateFile Result: ACCESS DENIED Path: C:\ TID: 2980 Duration: 0.0000359 Desired Access: Synchronize Disposition: Open Options: Directory, Synchronous IO Non-Alert, Open For Free Space Query Attributes: n/a ShareMode: Read, Write AllocationSize: n/a ============== So it appears the Diagnostic Policy Service is trying to do something with drive C:\ when its first starts up, but its initial access is denied and the service fails to load. I went to the properties for drive C:, Security tab, and added the following entry: LOCAL SERVICE -- Full Control of C:\ , After doing this I can now go into the Services console, manually start the Diagnostic Policy Service, and it loads and continues to operate without any problems: System log: * The Diagnostic Policy Service service entered the running state. * The Diagnostic System Host service entered the running state. * The Protected Storage service entered the running state. , If this post is helpful to you, I would be interested in seeing your replies. Dale Mahalko, dmahalko@gmail.com

Thanks for the sharing.Laura Zhang - MSFT