i don't know if this is the issue or not, but i seem to recall not being able to have a root folder as the data dir.
try creating n:\data\ and pointing it there.
Yep. It's a reported bug in the Bitcoin client. The workaround is to use a subdirectory.
Essentially, the client tries to create its data directory to make sure it exists. If it fails with any error other than "directory already exists", it barfs. Trying to create 'n:\' will fail, obviously, and not because the directory already exists, because there is no parent directory in which to create it. So the client sees the unusual error and assumes something is wrong with its data directory.
The correct approach is to attempt to create the directory, ignoring any errors generated. Then it should attempt to access the directory, and fail if it cannot.
