BUG #2268: initdb fails to initialize database cluster with error "Access is denied"

The following bug has been logged online:

Bug reference: 2268
Logged by: James Hughes
Email address: james_hughes(at)mcafee(dot)com
PostgreSQL version: 8.1.3
Operating system: Windows 2003 (Server)
Description: initdb fails to initialize database cluster with error
"Access is denied"
Details:

When we try and initialize a database cluster using initdb.exe we are
getting the following output.

-- OUTPUT from dbinit.exe --
The files belonging to this database system will be owned by user "user1".
This user must also own the server process.

The database cluster will be initialized with locale English_United
Kingdom.1252.

creating directory c:/dataa ... ok
creating directory c:/dataa/global ... ok
creating directory c:/dataa/pg_xlog ... ok
creating directory c:/dataa/pg_xlog/archive_status ... ok
creating directory c:/dataa/pg_clog ... ok
creating directory c:/dataa/pg_subtrans ... ok
creating directory c:/dataa/pg_twophase ... ok
creating directory c:/dataa/pg_multixact/members ... ok
creating directory c:/dataa/pg_multixact/offsets ... ok
creating directory c:/dataa/base ... ok
creating directory c:/dataa/base/1 ... ok
creating directory c:/dataa/pg_tblspc ... ok
selecting default max_connections ... Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
10
selecting default shared_buffers ... Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
Access is denied.
50
creating configuration files ... ok
creating template1 database in c:/dataa/base/1 ... ok
initializing pg_authid ... Access is denied.
child process was terminated by signal 1
initdb: removing data directory "c:/dataa"

-- end: OUTPUT from dbinit.exe --

user1 is a user without administrative rights. I have checked all the
directories and the user has permissons to write to the data directory, and
read other files it requires.

I also tried the Windows installer (MSI) from pgFoundry. This too is having
the same problem.

We have two machines which this problem occurs on, one of which originally
the initialization would work on. I have checked all the user rights
asssignments, and even given the postgres user (user1 in the above output
from dbinit.exe) all user rights.