Tried removing the read only flag early on. The properties box closes without any warnings but upon reopening, the flag is still set.

>"how did you reattach the db ?"

with EM. Why would doing it with QA be any better? More likely to make typing mistakes.

>"Something else to check. Are either the mdf file or ldf file marked as readonly? (Check the file properties) "

No.

Good suggestion, but no, there is no encryption or compression.

No, permissions are not the issue. I can create new DBs in that directory without a problem.