My apologies for being hasty on a  weekend, I think that is because I have been struggling with this for weeks.  I know it is my first time asking on this subject in this forum, but this thread was started in June and I did not want to be a pest and start a new thread.  If you feel that the links and information provided in this thread are enough information to actually be helpful to anybody other than seasoned ASP.NET programmer than please ignore all future posts from me. 

I will pay for some help now, and when I get the resolution I will post step by step instructions so that people like me, duchoangle and countless others will actually know what to do.

I understand that this is a problem that was unforeseeable during the evolution of DNN, but it is a pretty serious shortcoming.  This error also rears its ugly head when editing the portal CSS in Admin Settings.  One thing I tried was to create a virtual directory in IIS within the root of a portal but the DNN file manager only reads the Windows file  structure.  Maybe some code could be added to the core so that it could see IIS virtual directories too.  This would be a good solution so long as the file change monitor did not monitor virtual directories.