IIS 7 + Access Control Error (HRESULT: 0x80070005)

IIS 7 was working fine, then it stopped working. I was unable to debug sites running on IIS 7, furthermore i was not able to change any settings in IIS 7. For some reason my folders were set back to read only.

http://blog.crowe.co.nz/archive/2007/08/24/IIS7-Access-Denied-when-using-the-IIS-7-Manager.aspx