TeamCity EAP 5 build 10380 - Access to the path 'filename' is denied

I am trying to modify a file from an MSBuild script, this works fine when the VCS checkout mode is set to 'Automatically on server' , but when this is set to is set to 'Automatically on agent'  I get the following error from MSBuild "Access to the path 'filename' is denied".

I am using TFS 2008 and 5.0 EAP (build 10380)

Any ideas of what could be causing this problem?