Excel documents cannot be read on AFP/SMB share

I have a 10.6.8 server that shares files for multiple Macs and PCs.

For the most part is works fine.

All users are in Open Directory.

A user complained that they could not read any of the Excel files in 1 particular folder.

The effective permissions inspector showed no problems for those files for that user, YET, they were told they ddin't have permission to read the file!

A closer inspection in Server Admin, showed that all of those files had greyed out custom permssions for the group.

I could fix the problem by click on a file, then choosing Make Inherited Permissions Explicit.

That allowed me to change the group permissions to read/write.

Strangely, the parent folder permissions were fine.

AND.. propogating permissions did NOT fix it for me!

I had to fix the files one by one.

Does anyone have any insight into this problem?