This is how UAC works. You will find lots of documentation on UAC but they all forget to mention one thing (below).

If you are a member of the builtin administrators group and try to access a folder that allows this group to do so UAC expects you to access it in an elevated mode. If though your direct account had access to it or any other group did it would work fine (assuming you are a member of it). This issue only seems to affect the special builtin adminstrators group.

So you are meant to acces it in an elevated windows explorer right?? No, it doesn't work. Explorer is the only program that does not work from an elevated prompt, it is bugged.

Full article and work arounds I found here. It took me ages to find it http://think-like-a-computer.com/2011/05/11/uac-access-denied-on-folders-for-administrators-windows-2008/

You're seeing as-designed behaviour of User Account Control. Have a look at the articles below to learn about more about what's going on "under the hood" when you have UAC enabled.

Basically, your administrative privileges are being stripped from your security token when UAC is enabled (just as you're observing). In effect, UAC allows you to logon w/ an "Administrator"-level account but forces that account to "act" like a limited user. When you attempt to perform an action that requires administrator-level credentials UAC will prompt to elevate. After the elevation completes successfully the action you attempted to perform is done using the non-UAC-filtered security token (which still contains all your administrative group memberships).

• http://www.windowsecurity.com/articles/Exposing-Microsoft-Windows-7-User-Account-Control-UAC.html

• http://technet.microsoft.com/en-us/library/cc709691(WS.10).aspx

As an aisde, typically you don't need to (and really shouldn't) name "DOMAIN\Domain Admins" in permissions. The local "Administrators" group will contain "DOMAIN\Domain Admins" if the machine is joined to "DOMAIN", so naming "DOMAIN\Domain Admins" is redundant.