Symptoms

Windows shared hosting tasks fail in POA with error message 'The path specified cannot be used at this time'.

The detailed diagnostics may look like this:
Task ID    791637
Task name    Create virtual web server 52542 (domain_id=38258, hd_id=116928) on host 'winweb1.hosting.local' (host_id=783).
Task description    Create virtual web server 52542 (domain_id=38258, hd_id=116928) on host 'winweb1.hosting.local' (host_id=783).
Queue name    domain_service53004
Method name    taskCreateWebSite
Execution status    Failed    
Start not earlier than    Apr-10-2012 11:22
Finished    Apr-10-2012 11:25
Output    Provisioning request failed. The path specified cannot be used at this time.
[<response><errorContext description="Failed calling SetInfo IIS://winweb1.hosting.local/W3SVC/52542
LogFileDirectory 0x80070094: The path specified cannot be used at this time." code="0x80070094" executeSeqNo="57">
<errorSource namespace="IIS Provider" procedure="SetProperties"/></errorContext></response>]

Cause

The reason of problem is incorrect behavior of IIS server described in Microsoft KB article http://support.microsoft.com/kb/946517.

Resolution

Apply hotfix from Microsoft KB #946517 to solve the problem.

To work the problem around restart IIS service on the affected Windows server.