Can't remove Read-Only attribute in Windows 2003 Server

I've got a folder on a Windows 2003 R2 machine. I uncheck the "read-only" checkbox option, tell it to apply to all subfolders, and click ok.

it appears to work, except when I check it again, the read-only checkbox remains checked.

I'm logged in as administrator, and I verified that I'm the owner of that folder and its contents.

What am I missing?

This bug has been around since Win95 was released. i.e. The checkbox is checked regardless of the actual state of the attributes. Just ignore it.

Are there hidden files or folders in the folder? If so that could cause the check box to become rechecked.