The real tragedy of this error message is that there is no way to show the excluded files.  So you have to guess.  In this instance, a random Thumbs.db file got into the Visual Studio Setup Solution (vdproj, and unfortunate extension that describes and unfortunate tools) and was subsequently excluded.  When it came time to prune a directory of images, I was denied while deleting an IMAGES folder - with no way to figure out which file was hidden in that folder.  Only a miracle and a hunch caused me to remove the stray Thumbs.db (it was certainly out of place).  Then the directory was deleted without incident. 

Time wasted: 13 minutes.