DotNet: Could not execute CVTRES.EXE

This error is driving me crazy.

Everytime I try to compile a DLL, I get this error: "Could not execute CVTRES.EXE."

1) Last week the compile worked
2) I have uninstalled and reinstalled Framework 2 and VS2005
3) I have copied cvtres.exe files from other computers which do compile
to this computer.
4) I have deleted all copies of the DLL in question from my computer
and rebooted.
5) Everyone has full control of the destination folder where the
compiler is trying to put the compiled file.
6) I have deleted the destination folder.

Any further suggestion would be much appreciated.