Group Policy security settings could not be determined

We are running a Windows 2008R2 Enterprise Edition system. It is a member server in an Active Directory domain. A user, a member of the Local Administrators group was going to make a change in the Local Security Policy. When she selected "User Rights Assignment" she received this error message:

I have been able to duplicate it as well. These events are generated in the Application Log:

• Log Name:      Application
  Source:        ESENT
  Date:          1/30/2013 4:24:57 PM
  Event ID:      488
  Task Category: General
  Level:         Error
  Keywords:      Classic
  User:          N/A
  Computer:      NTSrv132.int.oru.edu
  Description:
  services (480) An attempt to create the file "C:\WINDOWS\Security\Database\tmp.edb" failed with system error 5 (0x00000005): "Access is denied. ".  The create file operation will fail with error -1032 (0xfffffbf8).
  Event Xml:
  <Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
    <System>
      <Provider Name="ESENT" />
      <EventID Qualifiers="0">488</EventID>
      <Level>2</Level>
      <Task>1</Task>
      <Keywords>0x80000000000000</Keywords>
      <TimeCreated SystemTime="2013-01-30T22:24:57.000000000Z" />
      <EventRecordID>2094149</EventRecordID>
      <Channel>Application</Channel>
      <Computer>NTSrv132.int.oru.edu</Computer>
      <Security />
    </System>
    <EventData>
      <Data>services</Data>
      <Data>480</Data>
      <Data>
      </Data>
      <Data>C:\WINDOWS\Security\Database\tmp.edb</Data>
      <Data>-1032 (0xfffffbf8)</Data>
      <Data>5 (0x00000005)</Data>
      <Data>Access is denied. </Data>
    </EventData>
  </Event>

• Log Name:      Application
  Source:        ESENT
  Date:          1/30/2013 4:25:07 PM
  Event ID:      488
  Task Category: General
  Level:         Error
  Keywords:      Classic
  User:          N/A
  Computer:      NTSrv132.int.oru.edu
  Description:
  services (480) An attempt to create the file "C:\WINDOWS\Security\Database\tmp.edb" failed with system error 5 (0x00000005): "Access is denied. ".  The create file operation will fail with error -1032 (0xfffffbf8).
  Event Xml:
  <Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
    <System>
      <Provider Name="ESENT" />
      <EventID Qualifiers="0">488</EventID>
      <Level>2</Level>
      <Task>1</Task>
      <Keywords>0x80000000000000</Keywords>
      <TimeCreated SystemTime="2013-01-30T22:25:07.000000000Z" />
      <EventRecordID>2094150</EventRecordID>
      <Channel>Application</Channel>
      <Computer>NTSrv132.int.oru.edu</Computer>
      <Security />
    </System>
    <EventData>
      <Data>services</Data>
      <Data>480</Data>
      <Data>
      </Data>
      <Data>C:\WINDOWS\Security\Database\tmp.edb</Data>
      <Data>-1032 (0xfffffbf8)</Data>
      <Data>5 (0x00000005)</Data>
      <Data>Access is denied. </Data>
    </EventData>
  </Event>

• Log Name:      Application
  Source:        ESENT
  Date:          1/30/2013 4:25:18 PM
  Event ID:      488
  Task Category: General
  Level:         Error
  Keywords:      Classic
  User:          N/A
  Computer:      NTSrv132.int.oru.edu
  Description:
  wuaueng.dll (828) SUS20ClientDataStore: An attempt to create the file "C:\Windows\SoftwareDistribution\DataStore\Logs\tmp.edb" failed with system error 5 (0x00000005): "Access is denied. ".  The create file operation will fail with error -1032 (0xfffffbf8).
  Event Xml:
  <Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
    <System>
      <Provider Name="ESENT" />
      <EventID Qualifiers="0">488</EventID>
      <Level>2</Level>
      <Task>1</Task>
      <Keywords>0x80000000000000</Keywords>
      <TimeCreated SystemTime="2013-01-30T22:25:18.000000000Z" />
      <EventRecordID>2094151</EventRecordID>
      <Channel>Application</Channel>
      <Computer>NTSrv132.int.oru.edu</Computer>
      <Security />
    </System>
    <EventData>
      <Data>wuaueng.dll</Data>
      <Data>828</Data>
      <Data>SUS20ClientDataStore: </Data>
      <Data>C:\Windows\SoftwareDistribution\DataStore\Logs\tmp.edb</Data>
      <Data>-1032 (0xfffffbf8)</Data>
      <Data>5 (0x00000005)</Data>
      <Data>Access is denied. </Data>
    </EventData>
  </Event>

I have given the Users security group all permissions except "Full control" and "Special Permissions" to C:\Windows\SoftwareDistribution\DataStore\Logs\tmp.edb and C:\WINDOWS\Security\Database\tmp.edb but the result was the same. I have reviewed numerous articles on the internet. Most don't apply to Windows Server 2008 but the ones that do havent't provided a solution. For example, many articles describe using the Security Configuration and Analysis to open the secedit.sdb database. I receive an "Access to the database has been denied." error. Does anyone have any ideas how to trouble shoot this?