We performed a proper reboot of the server to resolve a problem with taking backups tonight, and this happened, we were not expecting it at all, as normally this only happens with a forced reboot. We don't have an ETA on the scan completion as it is nearly impossible to tell how long it will take, but it is correcting a number of records now.
It looks like we have been bitten by a bit of a bug from the past, WinCF runs Windows 2003 SP2, but it has detected an error in files from before SP2 that will require us to reset permissions once it is up.
This is the bug, SP2 has been in place for some time, but full scan had not been run(not required to this point), and this bug existed it seems long before.
what had me baffled was that this was already windows 2003 SP2 installed + hotfixed after that this clarified a bit further down:
This hotfix prevents future corruption. It does not fix existing corruption. Recreating the volumes after Windows Server 2003 SP2 or this hotfix is installed will prevent the problem. Contact Microsoft Product Support Services (PSS) to help troubleshoot existing corruption.
At this point, we are going to allow it to finish, and then run the security creation scripts to correct permissions again under the SP2 corrected scheme.
The stage3 is still going, we have no choice at this point but to wait until it is done, as either way it will have file permissions changes needed, and if we were to stop it now it could make problems that could not be repaired.
The scan is done and in windows now, we are starting to work on correcting permissions at this time, FTP files may be inaccessible for a bit, and some sites may ask for passwords, we are working with automated tools to correct this now.