cp creates unreadable file on Windows 7

Wed Oct 9 21:30:00 GMT 2013

I believe my problem is identical to the one reported in:
http://cygwin.com/ml/cygwin/2012-02/msg00456.html, but that message chain ended with
"mount your file system noacl" which isn't an option for me, so I'm looking for
other alternatives.
I create a file using cmd.exe in a directory created by cmd.exe. Then in Cygwin bash I
mkdir a directory (two levels deep) and cp the file into the new directory. The resulting
file is not readable by any Windows or Cygwin executable. I can't say whether this is
correct or not, but it surprised me.
I am on a corporate network (logged in using network credentials). The filesystem is NTFS,
the machine is Windows 7. I am an Administrator on the machine. I am using the new 64-bit
Cygwin installed in c:\users\mifrank\cygwin64, but the problem was originally reported by
several of my users, and they are using slightly older 32-bit versions of Cygwin installed
in c:\cygwin.
Reproducer. Step 1 (must be done in a cmd.exe shell.)
	C:\>md dos-level1
	C:\>echo foo > dos-level1\bar
	C:\>cat dos-level1\bar
	foo
	C:\>icacls.exe dos-level1\
	dos-level1\ BUILTIN\Administrators:(I)(F)
 BUILTIN\Administrators:(I)(OI)(CI)(IO)(F)
 NT AUTHORITY\SYSTEM:(I)(F)
 NT AUTHORITY\SYSTEM:(I)(OI)(CI)(IO)(F)
 BUILTIN\Users:(I)(OI)(CI)(RX)
 NT AUTHORITY\Authenticated Users:(I)(M)
 NT AUTHORITY\Authenticated Users:(I)(OI)(CI)(IO)(M)
	Successfully processed 1 files; Failed processing 0 files
	C:\>icacls.exe dos-level1\bar
	dos-level1\bar BUILTIN\Administrators:(I)(F)
 NT AUTHORITY\SYSTEM:(I)(F)
 	 BUILTIN\Users:(I)(RX)
 NT AUTHORITY\Authenticated Users:(I)(M)
	Successfully processed 1 files; Failed processing 0 files
Step 2 (from Cygwin bash shell)
	$ cygcheck -V
	cygcheck (cygwin) 1.7.25
	$ cd /cygdrive/c/
	$ groups
	Domain Users Users
	$ umask
	0022
	$ mkdir --parents cyg-level1/cyg-level2
	$ cat dos-level1/bar
	foo
	$ cp dos-level1/bar cyg-level1/cyg-level2/
	$ cat cyg-level1/cyg-level2/bar
	cat: cyg-level1/cyg-level2/bar: Permission denied
	$ icacls.exe cyg-level1/cyg-level2/
	cyg-level1/cyg-level2/ AMR\mifrank:(F)
 AMR\Domain Users:(RX)
 Everyone:(RX)
 BUILTIN\Administrators:(F)
 NT AUTHORITY\SYSTEM:(F)
 BUILTIN\Users:(RX)
 NT AUTHORITY\Authenticated Users:(M)
 CREATOR OWNER:(OI)(CI)(IO)(F)
 CREATOR GROUP:(OI)(CI)(IO)(RX)
 Everyone:(OI)(CI)(IO)(RX)
	Successfully processed 1 files; Failed processing 0 files
	$ icacls.exe cyg-level1/cyg-level2/bar
	cyg-level1/cyg-level2/bar AMR\mifrank:(D,Rc,WDAC,WO,RA,WA)
 AMR\Domain Users:(Rc,S,RA)
 Everyone:(Rc,S,RA)
	Successfully processed 1 files; Failed processing 0 files
On the other hand:
	$ echo fromcyg > cyg-level1/cyg-level2/baz
	$ cat cyg-level1/cyg-level2/baz
	fromcyg
	$ icacls.exe cyg-level1/cyg-level2/baz
	cyg-level1/cyg-level2/baz AMR\mifrank:(R,W,D,WDAC,WO)
 AMR\Domain Users:(R)
 Everyone:(R)
	Successfully processed 1 files; Failed processing 0 files
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