this looks something like Allocation Table issue... start from simple solutions ...
use scandisk from the properties of your C drive... if this does not help then try defragmentation ...
You might probably boot your system in safe mood and then delete your folder. To boot your windows in safe mood keep pressing F8 key during booting, right before the windows Logo appear.... and then select safe mood...
if this does not help then (according to your information) you need to stop or uninstall AVG (stopping will keep the Virus Vault)....