The Background (skip to the bottom if you want the question)
Recently I upgraded an SVN repository (hosted on assembla) to SVN 1.7. After doing so,
I found this exact same issue happened when I did a 'Revert' using:
I was completely puzzled the first time I encountered the permissions error and started off by thinking it was my code. After a while of fiddling about I ended up deleting the whole project and re-downloading from Subversion which fixed the issue.
When this problem happened again I looked more closely at the reverted file, and I found the permissions on the reverted files do not match the permissions of the other files. Specifically 'Users' permissions, for the machine that Visual Studio is running on, is missing altogether.
So I just added it in by:
Your website should now run without the permissions error.