So much for that idea... >.<
The problem is unlikely to have anything to do with the read only attribute:
Unlike the Read-only attribute for a file, the Read-only attribute for a folder is typically ignored by Windows, Windows components and accessories, and other programs. For example, you can delete, rename, and change a folder with the Read-only attribute by using Windows Explorer. The Read-only and System attributes is only used by Windows Explorer to determine whether the folder is a special folder, such as a system folder that has its view customized by Windows (for example, My Documents, Favorites, Fonts, Downloaded Program Files), or a folder that you customized by using the Customize tab of the folder's Properties dialog box. As a result, Windows Explorer does not allow you to view or change the Read-only or System attributes of folders.
The whole reason why it is shaded (set to the third option, as you described) is because it's not a normally usable option for folders. However, if you still want to try changing it...
To view or to remove the Read-only or the System attributes of folders in Windows Server 2003 or in Windows XP
Click Start, click Run, type cmd, and then press ENTER.
To view the syntax for the Attrib command, type attrib \? at the command prompt.
Warning If you remove the Read-only or System attribute from a folder, it may appear as a ordinary folder and some customizations may be lost. For example, Windows customizes the Fonts folder and provides a special folder view that permits you to hide variations, such as bold and italic. It also permits you to change the folder's view settings in ways that are specific to fonts. If you remove the Read-only and System attributes of the Fonts folder, these customized view settings are not available. For folders that you have customized by using the Customize tab of the folder's Properties dialog box, the folder icon and other other customizations may be lost when you remove the Read-only attribute.
If a program cannot save files to a folder with the Read-only attribute, such as My Documents, change the Read-only attribute to System by using the Attrib command at a command prompt.
To remove the Read-only attribute and to set the System attribute, use the following command:
attrib -r +s drive:\<path>\<foldername>
For example, to remove the Read-only attribute and to set the System attribute for the C:\Test folder, use the following command:
attrib -r +s c:\test
Be aware that some programs may not operate correctly with folders for which the System attribute and the Read-only attribute are set. Therefore, use the following command to remove these attributes:
attrib -r -s c:\test