Unable to create the folder 'new folder' File system error (340)

[evilsatan]

Anyone have any experience with this one? If I try to create a file or folder anywhere by right clicking, new, text document (or folder) I receive the error:
Unable to create the folder 'new folder' File system error (340)

The same goes for creating files on local drives or network drives.
Also can't rename or delete files, there isn't an error, it just doesn't do anything or reverts to original filename.

I have tried:
sfc /scannow - This fails to run using elevated cmd or MSDaRT boot CD
chkdsk c: /r - This completes but issue remains and still can't run sfc
System restore doesn't make any difference
Clean user profile - same problem
Safe mode
Ran the WD HDD diag - passed short and extended tests
Replaced RAM

To me it looks like an HDD problem but not being able to create folders on the network drive threw me a bit... If I type a text file I can save it from within the program which is also weird and if I use the explorer window that opens when I save a file I can create folders.

I am running a MBAM scan now but there are no obvious signs of an infection. Obviously I can format and reinstall but if the HDD was the cause I'd rather get a warranty replacement and reinstall then.

Any ideas? I might back it up now, format, reinstall, restore backup, image then let them run it. At least that way if it does fail again I can quickly reimage the warranty replacement drive.

Cheers