I tried to upgrade my links module from 3.03 to 4.00 and I got this error.
ExceptionSystem.UnauthorizedAccessException: Access to the path 'C:\DNN\Website\bin\DotNetNuke.Modules.Links.dll' is denied. at System.IO.__Error.WinIOError(Int32 errorCode, String maybeFullPath) at System.IO.File.SetAttributes(String path, FileAttributes fileAttributes) at DotNetNuke.Modules.Admin.ResourceInstaller.PaDnnInstallerBase.CreateFile(String FullFileName, Byte[] Buffer) at DotNetNuke.Modules.Admin.ResourceInstaller.PaDnnInstallerBase.CreateBinFile(PaFile File) at DotNetNuke.Modules.Admin.ResourceInstaller.PaDnnInstallerBase.CreateFiles(PaFolder Folder) at DotNetNuke.Modules.Admin.ResourceInstaller.PaDnnInstallerBase.Install(PaFolderCollection folders) at DotNetNuke.Modules.Admin.ResourceInstaller.PaInstaller.Install()

I tried to install it again and I got ALOT more errors.

Now I am getting all kinds of error on modules. I just tried to change the friendly name on a different module and I get this error.

Error: Edit Module Definition is currently unavailable.
DotNetNuke.Services.Exceptions.ModuleLoadException: Access to the path 'C:\DNN\Website\web.config' is denied. ---> System.UnauthorizedAccessException: Access to the path 'C:\DNN\Website\web.config' is denied. at System.IO.__Error.WinIOError(Int32 errorCode, String maybeFullPath) at System.IO.FileStream.Init(String path, FileMode mode, FileAccess access, Int32 rights, Boolean useRights, FileShare share, Int32 bufferSize, FileOptions options, SECURITY_ATTRIBUTES secAttrs, String msgPath, Boolean bFromProxy) at System.IO.FileStream..ctor(String path, FileMode mode, FileAccess access, FileShare share, Int32 bufferSize) at System.IO.File.OpenFile(String path, FileAccess access, SafeFileHandle& handle) at System.IO.File.SetLastWriteTimeUtc(String path, DateTime lastWriteTimeUtc) at System.IO.File.SetLastWriteTime(String path, DateTime lastWriteTime) at DotNetNuke.Common.Utilities.Config.Touch() at DotNetNuke.Modules.Admin.ModuleDefinitions.EditModuleDefinition.UpdateModuleInterfaces(String BusinessControllerClass) at DotNetNuke.Modules.Admin.ModuleDefinitions.EditModuleDefinition.cmdUpdate_Click(Object sender, EventArgs e) --- End of inner exception stack trace ---

I have double checked the permission on the folders
Here is what I have set ASPNET User Account to:
Root(and child) - R and W
Desktop Module  - W and M
Portas  -W and M
I had backed up the DDN folder but database admin didn't have a backup for SQL so that isn't an option. Suggestions??

I'd check those file permissions again.

In some cases, you might have to delete the problem file and reinstall the upgrade.  I believe that one instance of this happening was because I'd not assigned permissions correctly.  Double or triple-check the identity of the default asp.net user account and make sure that it has the correct permisison.