JVM is crashing and I cant understand why

I think I have found what caused this error, but I can't understand why or how to fix it. I have tried running this code in two Windows 7 and one Windows 8 machine with the same results. The error doesn't always happen but it does sometimes. Here is the piece of code I think is causing it.

private WatchKey registerPath(Path path) {
    try {
        System.out.println("Making Key for: " + path.toString());
        System.out.println("ChangesWatcher: " + changesWatcher);
        WatchKey key =  path.register(changesWatcher,
                StandardWatchEventKinds.ENTRY_MODIFY,
                StandardWatchEventKinds.ENTRY_DELETE,
                StandardWatchEventKinds.ENTRY_CREATE);
        System.out.println("Done Making Key");
        return key;
    } catch (Exception err) {
        err.printStackTrace(System.out);
        return null;
    }
}

And this is the console output:

Making Key for: C:\Users\Fiona\Simple Cloud
ChangesWatcher: sun.nio.fs.WindowsWatchService@2be33a92
#
# A fatal error has been detected by the Java Runtime Environment:
#
#  EXCEPTION_ACCESS_VIOLATION (0xc0000005) at pc=0x000000007782386a, pid=5332, tid=4672
#
# JRE version: 7.0_25-b17
# Java VM: Java HotSpot(TM) 64-Bit Server VM (23.25-b01 mixed mode windows-amd64 compressed oops)
# Problematic frame:
# C  [ntdll.dll+0x5386a]  RtlAllocateHeap+0x4ca
#
# Failed to write core dump. Minidumps are not enabled by default on client versions of Windows
#
# An error report file with more information is saved as:
# M:\Programing_Stuff\Cloud\CloudServerClient\hs_err_pid5332.log
#
# If you would like to submit a bug report, please visit:
#   http://bugreport.sun.com/bugreport/crash.jsp
#
Java Result: 1

As you can see, it never reaches the System.out.println("Done Making Key"); line. Does anyone understand why this is happening? Because I have tried it in 3 machines I am assuming this is not a hardware issue. Any ideas? Thank you a lot guys and girls.

Here is hs_err_pid5332.log :

    #
# A fatal error has been detected by the Java Runtime Environment:
#
#  EXCEPTION_ACCESS_VIOLATION (0xc0000005) at pc=0x000000007782386a, pid=5332, tid=4672
#
# JRE version: 7.0_25-b17
# Java VM: Java HotSpot(TM) 64-Bit Server VM (23.25-b01 mixed mode windows-amd64 compressed oops)
# Problematic frame:
# C  [ntdll.dll+0x5386a]  RtlAllocateHeap+0x4ca
#
# Failed to write core dump. Minidumps are not enabled by default on client versions of Windows
#
# If you would like to submit a bug report, please visit:
#   http://bugreport.sun.com/bugreport/crash.jsp
#

---------------  T H R E A D  ---------------

Current thread (0x000000000d666800):  JavaThread "Thread-1" daemon [_thread_in_vm, id=4672, stack(0x000000000f220000,0x000000000f320000)]

siginfo: ExceptionCode=0xc0000005, reading address 0xffffffffffffffff

Registers:
RAX=0x00000000000007ff, RBX=0x0000000002090000, RCX=0x00000000fffffc04, RDX=0x0000000013409000
RSP=0x000000000f31e850, RBP=0x0000000000000000, RSI=0x0024007e00000048, RDI=0x0000000013408ff0
R8 =0x00000000020933b0, R9 =0x0000000000100000, R10=0x0000000013409000, R11=0x0000000300000000
R12=0x00000000778e5430, R13=0x0000000000000403, R14=0x0000000000000002, R15=0x00000000778e5401
RIP=0x000000007782386a, EFLAGS=0x0000000000010206

Top of Stack: (sp=0x000000000f31e850)
0x000000000f31e850:   0000000000007000 000000000d425000
0x000000000f31e860:   000000000f31e8c0 0000000077825d84
0x000000000f31e870:   000000000f31e8c0 0000000000398434
0x000000000f31e880:   0000000100399e01 00000000778e5401
0x000000000f31e890:   0000000000000000 00000000134b4a70
0x000000000f31e8a0:   0000000013408ff0 0000000000000000
0x000000000f31e8b0:   000000000f31ea31 00000000003dc0e0
0x000000000f31e8c0:   0000000000000230 00020000a3da0000
0x000000000f31e8d0:   0000003600000000 0000000207ff0201
0x000000000f31e8e0:   0000003600000000 0000000000000000
0x000000000f31e8f0:   0000000000000003 0000000000000036
0x000000000f31e900:   00000000134b4aa6 0000000000000036
0x000000000f31e910:   000000077bb90000 0000000013409000
0x000000000f31e920:   0000000000000000 000000000f31eaa6
0x000000000f31e930:   000000000f31ea70 00000000134b4a70
0x000000000f31e940:   0000000002080036 000000000f31ea70 

Instructions: (pc=0x000000007782386a)
0x000000007782384a:   47 0b 0f 85 e6 c2 00 00 0f b7 47 08 49 3b c5 0f
0x000000007782385a:   82 40 c3 00 00 4c 8d 57 10 4d 8b 1a 48 8b 77 18
0x000000007782386a:   48 8b 0e 4d 8b 4b 08 49 3b c9 0f 85 02 c3 00 00
0x000000007782387a:   49 3b ca 0f 85 f9 c2 00 00 48 29 83 c8 00 00 00 


Register to memory mapping:

RAX=0x00000000000007ff is an unknown value
RBX=0x0000000002090000 is an unknown value
RCX=0x00000000fffffc04 is an unknown value
RDX=0x0000000013409000 is an unknown value
RSP=0x000000000f31e850 is pointing into the stack for thread: 0x000000000d666800
RBP=0x0000000000000000 is an unknown value
RSI=0x0024007e00000048 is an unknown value
RDI=0x0000000013408ff0 is an unknown value
R8 =0x00000000020933b0 is an unknown value
R9 =0x0000000000100000 is an unknown value
R10=0x0000000013409000 is an unknown value
R11=0x0000000300000000 is an unknown value
R12=0x00000000778e5430 is an unknown value
R13=0x0000000000000403 is an unknown value
R14=0x0000000000000002 is an unknown value
R15=0x00000000778e5401 is an unknown value


Stack: [0x000000000f220000,0x000000000f320000],  sp=0x000000000f31e850,  free space=1018k
Native frames: (J=compiled Java code, j=interpreted, Vv=VM code, C=native code)
C  [ntdll.dll+0x5386a]  RtlAllocateHeap+0x4ca

[error occurred during error reporting (printing native stack), id 0xc0000005]

Java frames: (J=compiled Java code, j=interpreted, Vv=VM code)
j  sun.misc.Unsafe.allocateMemory(J)J+0
j  sun.nio.fs.NativeBuffer.<init>(I)V+10
j  sun.nio.fs.NativeBuffers.allocNativeBuffer(I)Lsun/nio/fs/NativeBuffer;+16
j  sun.nio.fs.NativeBuffers.getNativeBuffer(I)Lsun/nio/fs/NativeBuffer;+17
j  sun.nio.fs.WindowsWatchService$Poller.implRegister(Ljava/nio/file/Path;Ljava/util/Set;[Ljava/nio/file/WatchEvent$Modifier;)Ljava/lang/Object;+357
j  sun.nio.fs.AbstractPoller.processRequests()Z+116
j  sun.nio.fs.WindowsWatchService$Poller.run()V+27
j  java.lang.Thread.run()V+11
v  ~StubRoutines::call_stub

---------------  P R O C E S S  ---------------

Java Threads: ( => current thread )
  0x00000000135a1800 JavaThread "Thread-9" [_thread_blocked, id=6620, stack(0x0000000013c30000,0x0000000013d30000)]
  0x0000000013570000 JavaThread "Thread-8" [_thread_in_native, id=6448, stack(0x0000000013f30000,0x0000000014030000)]
  0x0000000013438000 JavaThread "TimerQueue" daemon [_thread_blocked, id=6200, stack(0x0000000013d50000,0x0000000013e50000)]
  0x000000000d73e800 JavaThread "D3D Screen Updater" daemon [_thread_blocked, id=6860, stack(0x0000000013a90000,0x0000000013b90000)]
=>0x000000000d666800 JavaThread "Thread-1" daemon [_thread_in_vm, id=4672, stack(0x000000000f220000,0x000000000f320000)]
  0x000000000209c800 JavaThread "DestroyJavaVM" [_thread_blocked, id=6176, stack(0x0000000002300000,0x0000000002400000)]
  0x000000000d5cc000 JavaThread "AWT-EventQueue-0" [_thread_blocked, id=5636, stack(0x000000000dec0000,0x000000000dfc0000)]
  0x000000000d4a5000 JavaThread "AWT-Windows" daemon [_thread_in_native, id=6912, stack(0x000000000ddc0000,0x000000000dec0000)]
  0x000000000d4a4000 JavaThread "AWT-Shutdown" [_thread_blocked, id=3768, stack(0x000000000db50000,0x000000000dc50000)]
  0x000000000d448000 JavaThread "Java2D Disposer" daemon [_thread_blocked, id=6024, stack(0x000000000d930000,0x000000000da30000)]
  0x000000000b779800 JavaThread "Service Thread" daemon [_thread_blocked, id=7032, stack(0x000000000d310000,0x000000000d410000)]
  0x000000000b771000 JavaThread "C2 CompilerThread1" daemon [_thread_blocked, id=7040, stack(0x000000000d070000,0x000000000d170000)]
  0x000000000b76c000 JavaThread "C2 CompilerThread0" daemon [_thread_blocked, id=6996, stack(0x000000000cf30000,0x000000000d030000)]
  0x000000000b76b000 JavaThread "Attach Listener" daemon [_thread_blocked, id=6444, stack(0x000000000cd50000,0x000000000ce50000)]
  0x000000000b764000 JavaThread "Signal Dispatcher" daemon [_thread_blocked, id=6372, stack(0x000000000cc20000,0x000000000cd20000)]
  0x0000000002198800 JavaThread "Finalizer" daemon [_thread_blocked, id=5856, stack(0x000000000cab0000,0x000000000cbb0000)]
  0x0000000002192000 JavaThread "Reference Handler" daemon [_thread_blocked, id=4140, stack(0x000000000c8f0000,0x000000000c9f0000)]

Other Threads:
  0x000000000b6e2800 VMThread [stack: 0x000000000c6f0000,0x000000000c7f0000] [id=6680]
  0x000000000b782800 WatcherThread [stack: 0x000000000d1d0000,0x000000000d2d0000] [id=6244]

VM state:not at safepoint (normal execution)

VM Mutex/Monitor currently owned by a thread: None

Heap
 PSYoungGen      total 38016K, used 18308K [0x00000007d5960000, 0x00000007d83c0000, 0x0000000800000000)
  eden space 32640K, 56% used [0x00000007d5960000,0x00000007d6b41038,0x00000007d7940000)
  from space 5376K, 0% used [0x00000007d7e80000,0x00000007d7e80000,0x00000007d83c0000)
  to   space 5376K, 0% used [0x00000007d7940000,0x00000007d7940000,0x00000007d7e80000)
 ParOldGen       total 86848K, used 0K [0x0000000780c00000, 0x00000007860d0000, 0x00000007d5960000)
  object space 86848K, 0% used [0x0000000780c00000,0x0000000780c00000,0x00000007860d0000)
 PSPermGen       total 21248K, used 15639K [0x000000077ba00000, 0x000000077cec0000, 0x0000000780c00000)
  object space 21248K, 73% used [0x000000077ba00000,0x000000077c945c78,0x000000077cec0000)

Card table byte_map: [0x00000000054c0000,0x00000000058f0000] byte_map_base: 0x00000000018e3000

Polling page: 0x0000000000340000

Code Cache  [0x0000000002400000, 0x0000000002670000, 0x0000000005400000)
 total_blobs=564 nmethods=77 adapters=438 free_code_cache=48439Kb largest_free_block=49574656

Compilation events (10 events):
Event: 1.041 Thread 0x000000000b76c000 nmethod 69 0x00000000024aa390 code [0x00000000024aa4e0, 0x00000000024aa838]
Event: 1.042 Thread 0x000000000b76c000   73             sun.misc.CharacterDecoder::readFully (52 bytes)
Event: 1.043 Thread 0x000000000b771000 nmethod 72 0x00000000024a9f10 code [0x00000000024aa060, 0x00000000024aa238]
Event: 1.045 Thread 0x000000000b771000    2 %           com.sun.crypto.provider.AESCrypt::<clinit> @ 724 (1577 bytes)
Event: 1.046 Thread 0x000000000b76c000 nmethod 73 0x00000000024ac4d0 code [0x00000000024ac620, 0x00000000024acab8]
Event: 1.111 Thread 0x000000000b76c000   74             java.math.BigInteger::subN (46 bytes)
Event: 1.114 Thread 0x000000000b76c000 nmethod 74 0x00000000024abcd0 code [0x00000000024abe00, 0x00000000024abfb8]
Event: 1.133 Thread 0x000000000b771000 nmethod 2% 0x00000000024b3f10 code [0x00000000024b4240, 0x00000000024b6b28]
Event: 25.514 Thread 0x000000000b76c000   75             java.io.Win32FileSystem::normalize (143 bytes)
Event: 25.520 Thread 0x000000000b76c000 nmethod 75 0x00000000024ad910 code [0x00000000024ada80, 0x00000000024add90]

GC Heap History (0 events):
No events

Deoptimization events (2 events):
Event: 0.914 Thread 0x000000000d70c000 Uncommon trap -83 fr.pc 0x000000000249d9a0
Event: 59.251 Thread 0x00000000135a1800 Uncommon trap -58 fr.pc 0x0000000002498fb8

Internal exceptions (10 events):
Event: 0.496 Thread 0x000000000d5cc000 Threw 0x00000007d5e262f8 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.496 Thread 0x000000000d5cc000 Threw 0x00000007d5e26520 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.592 Thread 0x000000000d5cc000 Threw 0x00000007d5e47970 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.597 Thread 0x000000000d5cc000 Threw 0x00000007d5e4af78 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.599 Thread 0x000000000d5cc000 Threw 0x00000007d5e4c780 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.618 Thread 0x000000000d70c000 Threw 0x00000007d5e92a70 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 0.913 Thread 0x000000000d70c000 Implicit null exception at 0x000000000249d4af to 0x000000000249d98d
Event: 1.126 Thread 0x000000000d70c000 Threw 0x00000007d69d26f8 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 1.134 Thread 0x00000000135a1800 Threw 0x00000007d6a9e5b8 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235
Event: 1.143 Thread 0x00000000135a1800 Threw 0x00000007d6aa1578 at C:\jdk7u2_64p\jdk7u25\hotspot\src\share\vm\prims\jvm.cpp:1235

Events (10 events):
Event: 4.077 Executing VM operation: EnableBiasedLocking done
Event: 4.170 loading class 0x000000000d5cbe10
Event: 4.171 loading class 0x000000000d5cbe10 done
Event: 5.639 Thread 0x000000000d73a000 Thread exited: 0x000000000d73a000
Event: 12.726 Executing VM operation: BulkRevokeBias
Event: 12.726 Executing VM operation: BulkRevokeBias done
Event: 19.996 Executing VM operation: BulkRevokeBias
Event: 19.996 Executing VM operation: BulkRevokeBias done
Event: 59.251 Thread 0x00000000135a1800 DEOPT PACKING pc=0x0000000002498fb8 sp=0x0000000013d2f2c0
Event: 59.251 Thread 0x00000000135a1800 DEOPT UNPACKING pc=0x0000000002439164 sp=0x0000000013d2f268 mode 2


Dynamic libraries:
0x000000013f1f0000 - 0x000000013f223000     C:\Program Files\Java\jdk1.7.0_25\bin\java.exe
0x00000000777d0000 - 0x0000000077979000     C:\Windows\SYSTEM32\ntdll.dll
0x00000000775b0000 - 0x00000000776cf000     C:\Windows\system32\kernel32.dll
0x000007fefd960000 - 0x000007fefd9cb000     C:\Windows\system32\KERNELBASE.dll
0x000007fefe210000 - 0x000007fefe2eb000     C:\Windows\system32\ADVAPI32.dll
0x000007fefead0000 - 0x000007fefeb6f000     C:\Windows\system32\msvcrt.dll
0x000007fefeb70000 - 0x000007fefeb8f000     C:\Windows\SYSTEM32\sechost.dll
0x000007fefeba0000 - 0x000007fefeccd000     C:\Windows\system32\RPCRT4.dll
0x00000000776d0000 - 0x00000000777ca000     C:\Windows\system32\USER32.dll
0x000007fefe790000 - 0x000007fefe7f7000     C:\Windows\system32\GDI32.dll
0x000007fefe2f0000 - 0x000007fefe2fe000     C:\Windows\system32\LPK.dll
0x000007fefe800000 - 0x000007fefe8c9000     C:\Windows\system32\USP10.dll
0x000007fefc060000 - 0x000007fefc254000     C:\Windows\WinSxS\amd64_microsoft.windows.common-controls_6595b64144ccf1df_6.0.7601.17514_none_fa396087175ac9ac\COMCTL32.dll
0x000007feffa60000 - 0x000007feffad1000     C:\Windows\system32\SHLWAPI.dll
0x000007fefe530000 - 0x000007fefe55e000     C:\Windows\system32\IMM32.DLL
0x000007fefe080000 - 0x000007fefe189000     C:\Windows\system32\MSCTF.dll
0x0000000056d60000 - 0x0000000056e31000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\msvcr100.dll
0x000000006dfb0000 - 0x000000006e6bf000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\server\jvm.dll
0x000007fef4ce0000 - 0x000007fef4ce9000     C:\Windows\system32\WSOCK32.dll
0x000007fefe300000 - 0x000007fefe34d000     C:\Windows\system32\WS2_32.dll
0x000007fefeb90000 - 0x000007fefeb98000     C:\Windows\system32\NSI.dll
0x000007fefa850000 - 0x000007fefa88b000     C:\Windows\system32\WINMM.dll
0x00000000779a0000 - 0x00000000779a7000     C:\Windows\system32\PSAPI.DLL
0x00000000743f0000 - 0x00000000743ff000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\verify.dll
0x0000000057590000 - 0x00000000575b8000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\java.dll
0x00000000743d0000 - 0x00000000743e5000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\zip.dll
0x0000000056bc0000 - 0x0000000056d55000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\awt.dll
0x000007fefd9e0000 - 0x000007fefdab7000     C:\Windows\system32\OLEAUT32.dll
0x000007fefdb40000 - 0x000007fefdd43000     C:\Windows\system32\ole32.dll
0x000007fefbd70000 - 0x000007fefbdc6000     C:\Windows\system32\uxtheme.dll
0x000007fefb7e0000 - 0x000007fefb7f8000     C:\Windows\system32\dwmapi.dll
0x000007fefd4e0000 - 0x000007fefd4ef000     C:\Windows\system32\CRYPTBASE.dll
0x000007fefecd0000 - 0x000007feffa58000     C:\Windows\system32\SHELL32.dll
0x0000000057470000 - 0x00000000574af000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\fontmanager.dll
0x000007fef7d50000 - 0x000007fef7f4f000     C:\Windows\system32\d3d9.dll
0x000007fefc6f0000 - 0x000007fefc6fc000     C:\Windows\system32\VERSION.dll
0x000007fef7d40000 - 0x000007fef7d47000     C:\Windows\system32\d3d8thk.dll
0x000007fee9b80000 - 0x000007feea9f4000     C:\Windows\system32\nvd3dumx.dll
0x000007fefbdd0000 - 0x000007fefbdfc000     C:\Windows\system32\powrprof.dll
0x000007fefe350000 - 0x000007fefe527000     C:\Windows\system32\SETUPAPI.dll
0x000007fefd760000 - 0x000007fefd796000     C:\Windows\system32\CFGMGR32.dll
0x000007fefd930000 - 0x000007fefd94a000     C:\Windows\system32\DEVOBJ.dll
0x000007feed260000 - 0x000007feed3b8000     C:\Program Files (x86)\NVIDIA Corporation\3D Vision\nvSCPAPI64.dll
0x000007fefa2e0000 - 0x000007fefa5d3000     C:\Windows\system32\nvapi64.dll
0x000007fefd720000 - 0x000007fefd759000     C:\Windows\system32\WINTRUST.dll
0x000007fefd7c0000 - 0x000007fefd92a000     C:\Windows\system32\CRYPT32.dll
0x000007fefd650000 - 0x000007fefd65f000     C:\Windows\system32\MSASN1.dll
0x0000000070cd0000 - 0x0000000070ce9000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\net.dll
0x000007fefce20000 - 0x000007fefce75000     C:\Windows\system32\mswsock.dll
0x000007fefce10000 - 0x000007fefce17000     C:\Windows\System32\wship6.dll
0x0000000057570000 - 0x0000000057581000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\nio.dll
0x000007fefe8d0000 - 0x000007fefe969000     C:\Windows\system32\CLBCatQ.DLL
0x000007fefb630000 - 0x000007fefb791000     C:\Windows\system32\WindowsCodecs.dll
0x000007fefd480000 - 0x000007fefd4d7000     C:\Windows\system32\apphelp.dll
0x000007fef83b0000 - 0x000007fef83e5000     C:\Windows\system32\EhStorShell.dll
0x000007fefbeb0000 - 0x000007fefbfdc000     C:\Windows\system32\PROPSYS.dll
0x000007fef82e0000 - 0x000007fef83a0000     C:\Program Files (x86)\Google\Drive\googledrivesync64.dll
0x000000006f340000 - 0x000000006f413000     C:\Windows\WinSxS\amd64_microsoft.vc90.crt_1fc8b3b9a1e18e3b_9.0.30729.6161_none_08e61857a83bc251\MSVCP90.dll
0x000000006f290000 - 0x000000006f333000     C:\Windows\WinSxS\amd64_microsoft.vc90.crt_1fc8b3b9a1e18e3b_9.0.30729.6161_none_08e61857a83bc251\MSVCR90.dll
0x0000000180000000 - 0x0000000180031000     C:\Program Files (x86)\Nuance\Nuance Cloud Connector\GlOverlayIcon.dll
0x000000006f040000 - 0x000000006f109000     C:\Windows\WinSxS\amd64_microsoft.vc80.crt_1fc8b3b9a1e18e3b_8.0.50727.6195_none_88e41e092fab0294\MSVCR80.dll
0x0000000005c00000 - 0x0000000005c32000     C:\Program Files (x86)\Nuance\Nuance Cloud Connector\GlOverlayIconU.dll
0x000007fef66a0000 - 0x000007fef6d12000     C:\PROGRA~1\MICROS~3\Office14\GROOVEEX.DLL
0x000000006ee00000 - 0x000000006ee2f000     C:\Windows\WinSxS\amd64_microsoft.vc90.atl_1fc8b3b9a1e18e3b_9.0.30729.6161_none_0a1fd3a3a768b895\ATL90.DLL
0x000007fef6290000 - 0x000007fef669f000     C:\PROGRA~1\COMMON~1\MICROS~1\OFFICE14\Cultures\office.odf
0x000007fef5a20000 - 0x000007fef6284000     C:\PROGRA~1\MICROS~3\Office14\1033\GrooveIntlResource.dll
0x000007feefb40000 - 0x000007feefbbe000     C:\Windows\System32\cscui.dll
0x000007feefb30000 - 0x000007feefb3c000     C:\Windows\System32\CSCDLL.dll
0x000007fef8ae0000 - 0x000007fef8aef000     C:\Windows\system32\CSCAPI.dll
0x000000006f7a0000 - 0x000000006fa2b000     C:\Program Files (x86)\Norton Security Suite\Engine64\20.4.0.40\buShell.dll
0x000007fefba70000 - 0x000007fefbc86000     C:\Windows\WinSxS\amd64_microsoft.windows.gdiplus_6595b64144ccf1df_1.1.7601.18120_none_2b25b14c71ebf230\gdiplus.dll
0x00000000570e0000 - 0x0000000057178000     C:\Program Files (x86)\Norton Security Suite\Engine64\20.4.0.40\MSVCP100.dll
0x00000000569d0000 - 0x0000000056ad6000     C:\Program Files (x86)\Norton Security Suite\Engine64\20.4.0.40\ccL120U.dll
0x0000000057090000 - 0x00000000570ae000     C:\Program Files (x86)\Norton Security Suite\Engine64\20.4.0.40\EFACli64.dll
0x000007fef3630000 - 0x000007fef36b0000     C:\Windows\system32\ntshrui.dll
0x000007fefd1e0000 - 0x000007fefd203000     C:\Windows\system32\srvcli.dll
0x000007fefae60000 - 0x000007fefae6b000     C:\Windows\system32\slc.dll
0x0000000057180000 - 0x00000000571c1000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\t2k.dll
0x000007fefa8d0000 - 0x000007fefa96c000     C:\Windows\system32\mscms.dll
0x000007fefc900000 - 0x000007fefc91e000     C:\Windows\system32\USERENV.dll
0x000007fefd5b0000 - 0x000007fefd5bf000     C:\Windows\system32\profapi.dll
0x000007fef2910000 - 0x000007fef2952000     C:\Windows\system32\icm32.dll
0x00000000568e0000 - 0x000000005690a000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\dcpr.dll
0x0000000057380000 - 0x00000000573a4000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\sunec.dll
0x0000000070da0000 - 0x0000000070dab000     C:\Program Files\Java\jdk1.7.0_25\jre\bin\sunmscapi.dll
0x000007fefce80000 - 0x000007fefce97000     C:\Windows\system32\CRYPTSP.dll
0x000007fefcb80000 - 0x000007fefcbc7000     C:\Windows\system32\rsaenh.dll
0x000007fefb000000 - 0x000007fefb015000     C:\Windows\system32\NLAapi.dll
0x000007fef4ca0000 - 0x000007fef4cb5000     C:\Windows\system32\napinsp.dll
0x000007fef4c80000 - 0x000007fef4c99000     C:\Windows\system32\pnrpnsp.dll
0x000007fefcca0000 - 0x000007fefccfb000     C:\Windows\system32\DNSAPI.dll
0x000007fef4c70000 - 0x000007fef4c7b000     C:\Windows\System32\winrnr.dll
0x000007fefc7c0000 - 0x000007fefc7c7000     C:\Windows\System32\wshtcpip.dll
0x000007fefad70000 - 0x000007fefad97000     C:\Windows\system32\IPHLPAPI.DLL
0x000007fefad50000 - 0x000007fefad5b000     C:\Windows\system32\WINNSI.DLL
0x000007fef9530000 - 0x000007fef9538000     C:\Windows\system32\rasadhlp.dll
0x000007fefa7b0000 - 0x000007fefa803000     C:\Windows\System32\fwpuclnt.dll
0x000007fef0220000 - 0x000007fef0345000     C:\Windows\system32\dbghelp.dll

VM Arguments:
jvm_args: -Dfile.encoding=UTF-8 
java_command: cloudserverclient.Home
Launcher Type: SUN_STANDARD

Environment Variables:
PATH=C:\Program Files (x86)\NVIDIA Corporation\PhysX\Common;C:\Windows\system32;C:\Windows;C:\Windows\System32\Wbem;C:\Windows\System32\WindowsPowerShell\v1.0\;C:\Program Files (x86)\Common Files\Roxio Shared\DLLShared\;C:\Program Files (x86)\Common Files\Roxio Shared\DLLShared\;C:\Program Files (x86)\Common Files\Roxio Shared\13.0\DLLShared\
USERNAME=Fiona
OS=Windows_NT
PROCESSOR_IDENTIFIER=AMD64 Family 21 Model 1 Stepping 2, AuthenticAMD



---------------  S Y S T E M  ---------------

OS: Windows 7 , 64 bit Build 7601 Service Pack 1

CPU:total 4 (4 cores per cpu, 1 threads per core) family 21 model 1 stepping 2, cmov, cx8, fxsr, mmx, sse, sse2, sse3, ssse3, sse4.1, sse4.2, popcnt, avx, mmxext, 3dnowpref, lzcnt, sse4a, tsc, tscinvbit, tscinv

Memory: 4k page, physical 8333768k(5353080k free), swap 16665676k(12112764k free)

vm_info: Java HotSpot(TM) 64-Bit Server VM (23.25-b01) for windows-amd64 JRE (1.7.0_25-b17), built on Jun 21 2013 12:58:32 by "java_re" with unknown MS VC++:1600

time: Tue Jul 23 02:23:36 2013
elapsed time: 61 seconds

I could not find a solution to my question but I found a work around. Let me explain how this was happening and how to achieve the same results.

This was used to monitor a directory. Upon finding a key, that key was being processed and canceled, then a new key was added to the watch service to keep monitoring the same folder. This didn't always result in the fatal error but it did so in average in 1 out of 10 attempts.

To get around this, instead of canceling the key every time a change was detected, I am just polling the events and used the reset() method of the key to re-add it to the watch service.

If you are going to attempt this, it is crucial that you poll() the events from the key before you reset it.

Regarding the error. I still don't know why it is happening but I have noticed that it happens some times when you are monitoring a directory anywhere in the C:/ drive (in Windows) such as My Documents. I tried to monitor a folder in a USB Drive and I couldn't reproduce the error (maybe I didn't try enough times). I submitted a bug report.