System.Data.SQLite

Hi I've written a windows service which reads and writes to sqlite. I've tested some of the code on the server as as a console app- and it works fine, however when I run it as a service it throws the following exception:

Exception: An error occurred while starting a transaction on the provider connection. See the inner exception for details.

Stack:    at System.Data.EntityClient.EntityConnection.BeginDbTransaction(IsolationLevel isolationLevel)
   at System.Data.Common.DbConnection.BeginTransaction()
   at System.Data.EntityClient.EntityConnection.BeginTransaction()
   at System.Data.Objects.ObjectContext.SaveChanges(Boolean acceptChangesDuringSave)
   at System.Data.Objects.ObjectContext.SaveChanges()
   at DirectoryWatcher.AirQualityFileReader.AddFileToDeletionQueue(String fullPath)

OK, some futher digging into the exception reveals the following error:

 Unable to open the database file

However, I can open the same file from a console app.

The Windows Service is run with the Network Services role, and I have given this user/role read/write/modify permissions to the sqlite db.

An example of my code is:

 try
            {
                string err = string.Empty;
                if (string.IsNullOrEmpty(ex2.StackTrace))
                {
                    err = "No Error";
                }
                else
                {
                    err = ex2.StackTrace;
                }
                using (var context = new SentAttemptsEntities())
                {
                    var id = from i in context.Files
                             select i.fileId;

                    Files files = new Files();
                    files.attempts = newFilePreviousAttempts;
                    files.errorMessage = err;
                    files.fileName = fileName;
                    files.fileId = id.Max() + 1;

                    context.AddToFiles(files);
                    context.SaveChanges();
                }



            }
            catch (Exception ex)
            {
                WriteToEventLog(ex, "Attempted to save attempts to sqlite ", EventLogEntryType.Error);
            }

If anyone has any ideas as to why this fails I would greatly appreciate to hear from you. Thanks