It's probably blocked by Windows - right click it and view its properties - there may be an "unblock" button.
Just checked and there is no Unblock option. Its very odd that it only happens on pdf files. The NTFS permissions are correct and the encryption key is correct. Most odd that it reads fine from the CD aswell.
Just tested it on Adobe Acrobat 9.3 and it works fine, so it appears that there is a bug with either Adobe Reader 10.1.4 or EEFF 4.0.1 that stops it reading encrypting pdf's that are copied to the desktop. I will try other versions of Adobe Reader to see which version introduced the issue.
It is an Adobe Reader X problem and found the fix:
- Open up Adobe Reader X
- On the Toolbar Menu go to Edit > Preferences
- Go to the general tab under Categories.
- Untick “Enable Protected Mode at Startup”
- If asked if sure, click Yes and then Ok.
- Now close Adobe Reader X and try opening the PDF again.