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I'm trying to setup Sharepoint 2010 (SQL Server 2008) to use SQL RBS for testing purposes. I followed all the steps required and in the process created a local folder C:\RBS_Store which serves as a BLOB store. The code samples (run from cmd) can access C:\RBS_Store and work fine. However, when I try to upload a file to a Sharepoint site from the browser/user interface, I get the following error:

The URL 'file I'm trying to upload' is invalid. It may refer to a nonexistent file or folder, or refer to a valid file or folder that is not in the current Web.

and the file is neither uploaded to be seen in the browser nor it gets stored in the C:\RBS_Store. I have no such problem if I use the default FILESTREAM RBS provider.

OS: Windows Server 2008 Enterprise SP2 x64

Sharepoint log reveals that before the error is displayed, this is what happens:

Exception thrown storing stream in new SqlRemoteBlob: System.TypeInitializationException: The type initializer for 'Microsoft.Data.SqlRemoteBlobs.ConfigItemList' threw an exception. ---> System.UnauthorizedAccessException: Access is denied. (Exception from HRESULT: 0x80070005 (E_ACCESSDENIED))

I'm guessing this has something to do with permissions, but am not exactly sure what/where to look for. Any ideas or help would be apperciated.

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