IIS application creation fails with BTDF

In Biztalk 2010 and Biztalk Deployment Framework 5.0 (BTDF) I want a virtual directory to be created.

I added the VDir sections in the .btdfproj file, but after deploy via the IDE (but also from the built MSI), I get these errors:

C:\Program Files (x86)\MSBuild\DeploymentFrameworkForBizTalk\5.0\
   BizTalkDeploymentFramework.targets(1646,5): 
     error MSB4018: The "CreateVirtualDirectory" task failed unexpectedly.
C:\Program Files (x86)\MSBuild\DeploymentFrameworkForBizTalk\5.0\
   BizTalkDeploymentFramework.targets(1646,5): 
     error MSB4018: System.Runtime.InteropServices.COMException (0x800700B7): 
     Cannot create a file when that file already exists. 
     (Exception from HRESULT: 0x800700B7)

I am using VS2010 (SP1), BTDF 5.0, WinServ2008R2 (64 bits), IIS6 backwards comp feature enabled. Even <UndeployIISArtifacts>true</UndeployIISArtifacts> does not help.

Solution found. It appears that a remove from the IIS 'Remove' doesn't delete all the files. A read this discussion: http://biztalkdeployment.codeplex.com/discussions/82081

I did this to resolve:

• Imported all the cmdlets (right click Powershell icon on taskbar -> Import system modules)
• Started Powershell, and put it in unrestricted mode: Set-ExecutionPolicy Unrestricted
• Add this command: Remove-WebConfigurationLocation -PSPath 'MACHINE/WEBROOT/APPHOST' -Name 'Default Web Site/[YOUR IIS APP]'

Replace [YOUR IIS APP] with your IIS application name to be removed.