I get the following error when accessing my DNN site:

Server Error in '/' Application.

---

Access to the path 'E:\DotNetNuke\DotNetNuke.config' is denied.

[UnauthorizedAccessException: Access to the path 'E:\DotNetNuke\DotNetNuke.config' is denied.]
   System.IO.__Error.WinIOError(Int32 errorCode, String maybeFullPath) +2014595
   System.IO.File.InternalCopy(String sourceFileName, String destFileName, Boolean overwrite) +488
   DotNetNuke.HttpModules.Compression.RequestFilter.RequestFilterSettings.GetSettings() +237
   DotNetNuke.HttpModules.Compression.RequestFilter.HttpModule.FilterRequest(Object sender, EventArgs e) +259
   System.Web.SyncEventExecutionStep.System.Web.HttpApplication.IExecutionStep.Execute() +92
   System.Web.HttpApplication.ExecuteStep(IExecutionStep step, Boolean& completedSynchronously) +64

I don't have a DotNetNuke.config file in the root of my DNN directory, but I do have one in a subdirectory called config.  I don't think that I should have to copy that file to the install directory and I can't find where that file is being referenced from any other file.  Has anyone else had this issue?

Thanks...

I've seen this error once before.

Tonight I'm setting up a client's web site on a server that I can only admin via thier control panel, and I got this error.

When I copied the dotnetnuke.config file from the /config folder to the root folder I progressed to this error:

Could not find a part of the path 'C:\Inetpub\vhosts\lumentech.co.za\httpdocs\Config\Backup_200841319\web_.config'.Access to the path 'C:\Inetpub\vhosts\lumentech.co.za\httpdocs\web.config' is denied.

DotNetNuke has extensive file upload capabilities for content, modules, and skins. These features require custom security settings so that the application is able to create and remove files in your website. 

I think it's because of the file permissions of the virtual root which causes that error and by copying the dotnetnuke.config file it's just getting around it to give the real problem's error.

I had the exact same problem.  But, from my experience it really is a directory permission problem.  I added NETWORK SERVICE and gave it read, write, execute permission and bada bing it worked. 

Hope this helps.