Problems with Volume Shadow Copy on Windows 7

I am having a problem with Volume Shadow Copy on my Windows 7 Ultimate PC. Basically, I cannot use any program that relies on Volume Shadow Copy as they always fail (including Windows Backup) with a whole list of errors (depending on the program). For example, when I run Windows Backup, I get:

The backup was not successful. The error is: Windows Backup failed while trying to read from the shadow copy on one of the volumes being backed up. Please check in the event logs for any relevant errors. (0x81000037).

Then I get this VSS Error:

Volume Shadow Copy Service error: Unexpected error querying for the IVssWriterCallback interface.  hr = 0x80070005, Access is denied.
. This is often caused by incorrect security settings in either the writer or requestor process. 

Operation:
   Gathering Writer Data

Context:
   Writer Class Id: {e8132975-6f93-4464-a53e-1050253ae220}
   Writer Name: System Writer
   Writer Instance ID: {33e11ab5-bc29-4cd0-b993-656570b23fe3}

Then when I run Paragon System Backup (version 9.5), I get the following (after it tells me there's a problem with VSS):

Volume Shadow Copy Service information: The COM Server with CLSID {4e14fba2-2e22-11d1-9964-00c04fbbb345} and name CEventSystem cannot be started. [0x80070013, The media is write protected.
] 

Volume Shadow Copy Service error: Unexpected error calling routine CoCreateInstance.  hr = 0x80070013, The media is write protected.
. 

Volume Shadow Copy Service information: The COM Server with CLSID {4e14fba2-2e22-11d1-9964-00c04fbbb345} and name CEventSystem cannot be started. [0x80070013, The media is write protected.
] 

Volume Shadow Copy Service error: Unexpected error calling routine CoCreateInstance.  hr = 0x80070013, The media is write protected.
. 

Then I get a Information Message saying:

The VSS service is shutting down due to idle timeout. 

(I got 5 of those when I tried to run a backup yesterday)

Then I get these warnings:

Volume Shadow Copy Service warning: VSS was denied access to the root of volume \\?\Volume{2d3b403a-2f5a-11df-846a-005056c00008}\. Denying administrators from accessing volume roots can cause many unexpected failures, and will prevent VSS from functioning properly.  Check security on the volume, and try the operation again. 

Operation:
   Removing auto-release shadow copies
   Loading provider

Context:
   Execution Context: System Provider

Volume Shadow Copy Service warning: VSS was denied access to the root of volume \\?\Volume{2d3b403a-2f5a-11df-846a-005056c00008}\. Denying administrators from accessing volume roots can cause many unexpected failures, and will prevent VSS from functioning properly.  Check security on the volume, and try the operation again. 

Operation:
   Automatically choosing a diff-area volume
   Processing EndPrepareSnapshots

Context:
   Execution Context: System Provider

Volume Shadow Copy Service warning: VSS was denied access to the root of volume \\?\Volume{2d3b403a-2f5a-11df-846a-005056c00008}\. Denying administrators from accessing volume roots can cause many unexpected failures, and will prevent VSS from functioning properly.  Check security on the volume, and try the operation again. 

Operation:
   Automatically choosing a diff-area volume
   Processing EndPrepareSnapshots

Context:
   Execution Context: System Provider

When I run vssadmin list writer:

Writer name: 'Task Scheduler Writer'
   Writer Id: {d61d61c8-d73a-4eee-8cdd-f6f9786b7124}
   Writer Instance Id: {1bddd48e-5052-49db-9b07-b96f96727e6b}
   State: [1] Stable
   Last error: No error

Writer name: 'VSS Metadata Store Writer'
   Writer Id: {75dfb225-e2e4-4d39-9ac9-ffaff65ddf06}
   Writer Instance Id: {088e7a7d-09a8-4cc6-a60

You can replace your Mounted Volume \\?\Volume{2d3b403a-2f5a-11df-846a-005056c00008}\ by a Junction and the error should go away; Microsoft's MSKB article says that error 0x81000037

"occurs if the reparse point is a mounted volume that contains compressed files (for example, multimedia files, .zip files, and so on)"

(emphasis mine)

Using Hard Link Shell Extension you can create "Junctions" to replace the "Mounted Volume" you are currently using. This is the HardLinkShellExt context menu I get when dragging my CD drive into a folder with the right mouse button:

• Doesn't work: with "mounted volume" included in Library included in Backup:

• Does work: with "junction" included in Library included in Backup:

See this answer I gave to a similar question (but with different cause) for more details about the topic.