I am trying to use Web Deploy to deploy a site where the Site is rooted on a UNC path instead of a local drive. This is because I want to have a shared configuration, and have all servers point to the same UNC for content. That would allow me to deploy to one server and have all servers updated at the same time. I've created a share with everyone  and users read/write. The NTFS permissions have the ID of the appDomain account as full control, and that is the same account that is configured as the specific user in Management Service Delegation. I can log on to the destination server as that ID, access the share and create/delete files.
However, I'm getting the following exception in my Microsoft Web Deploy log on the destination server:
  User:  Client IP: 192.168.62.174 Content-Type: application/msdeploy
  Version: 9.0.0.0 MSDeploy.VersionMin: 7.1.600.0 MSDeploy.VersionMax:
  9.0.1631.0 MSDeploy.Method: Sync MSDeploy.RequestId: c060c823-cdb4-4abe-8294-5ffbdc327d2e MSDeploy.RequestCulture: en-US
  MSDeploy.RequestUICulture: en-US ServerVersion: 9.0.1631.0 Skip:
  objectName="^configProtectedData$" Provider: auto, Path:  A tracing
  deployment agent exception occurred that was propagated to the client.
  Request ID 'c060c823-cdb4-4abe-8294-5ffbdc327d2e'. Request Timestamp:
  '8/23/2012 11:01:56 AM'. Error Details:
  ERROR_INSUFFICIENT_ACCESS_TO_SITE_FOLDER
  Microsoft.Web.Deployment.DeploymentDetailedUnauthorizedAccessException:
  Unable to perform the operation ("Create Directory")     for the
  specified directory
  ("\someserver.mydomain.local\sharename\sitename\applicationName").    This
  can occur if the server administrator has not authorized this
  operation for the user credentials you are using.   Learn more at:
  http://go.microsoft.com/fwlink/?LinkId=221672#ERROR_INSUFFICIENT_ACCESS_TO_SITE_FOLDER.
  --- Microsoft.Web.Deployment.DeploymentException: The error code was 0x80070005.    --- System.UnauthorizedAccessException: Access to the
  path '\someserver.mydomain.local\sharename\sitename\applicationName' is
  denied.    at
  Microsoft.Web.Deployment.NativeMethods.RaiseIOExceptionFromErrorCode(Win32ErrorCode
  errorCode, String maybeFullPath)    at
  Microsoft.Web.Deployment.DirectoryEx.CreateDirectory(String path)
  at Microsoft.Web.Deployment.DirPathProviderBase.CreateDirectory(String
  fullPath, DeploymentObject source)    at
  Microsoft.Web.Deployment.DirPathProviderBase.Add(DeploymentObject
  source, Boolean whatIf)    --- End of inner exception stack trace --- 
  --- End of inner exception stack trace ---    at Microsoft.Web.Deployment.FilePathProviderBase.HandleKnownRetryableExceptions(DeploymentBaseContext
  baseContext, Int32[] errorsToIgnore, Exception e, String path, String
  operation)    at
  Microsoft.Web.Deployment.DirPathProviderBase.Add(DeploymentObject
  source, Boolean whatIf)    at
  Microsoft.Web.Deployment.DeploymentObject.Add(DeploymentObject source,
  DeploymentSyncContext syncContext)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.HandleAdd(DeploymentObject
  destObject, DeploymentObject sourceObject)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.HandleUpdate(DeploymentObject
  destObject, DeploymentObject sourceObject)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.SyncChildrenNoOrder(DeploymentObject
  dest, DeploymentObject source)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.SyncChildrenNoOrder(DeploymentObject
  dest, DeploymentObject source)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.SyncChildrenOrder(DeploymentObject
  dest, DeploymentObject source)    at
  Microsoft.Web.Deployment.DeploymentSyncContext.ProcessSync(DeploymentObject
  destinationObject, DeploymentObject sourceObject)    at
  Microsoft.Web.Deployment.DeploymentObject.SyncToInternal(DeploymentObject
  destObject, DeploymentSyncOptions syncOptions, PayloadTable
  payloadTable, ContentRootTable contentRootTable, Nullable1
  syncPassId)    at
  Microsoft.Web.Deployment.DeploymentAgent.HandleSync(DeploymentAgentAsyncData
  asyncData, Nullable1 passId)    at
  Microsoft.Web.Deployment.DeploymentAgent.HandleRequestWorker(DeploymentAgentAsyncData
  asyncData)    at
  Microsoft.Web.Deployment.DeploymentAgent.HandleRequest(DeploymentAgentAsyncData
  asyncData)
This is shown as the following on the console of the machine where I run the deployment:
  C:\Users\PLaComb"C:\Program Files (x86)\IIS\Microsoft Web Deploy
  V3\msdeploy.exe" 
  -source:package='C:\Packages\Deployments\applicationName.zip'   -dest:auto,computerName='https://SERVERNAME:8172/msdeploy.axd',includeAcls='True'
  -verb:sync  -disableLink:AppPoolExtension   -disableLink:ContentExtension   -disableLink:CertificateExtension   -setParamFile:"C:\Packages\Deployments\applicationName.SetParameters.xml"
  -allowUntrusted Info: Using ID 'c060c823-cdb4-4abe-8294-5ffbdc327d2e' for connections to the remote server. Info: Adding sitemanifest
  (sitemanifest). Info: Adding virtual path (JMS/admin) Info: Adding
  directory (JMS/admin). Error Code:
  ERROR_INSUFFICIENT_ACCESS_TO_SITE_FOLDER More Information: Unable to
  perform the operation ("Create Directory") for the specified directory
  ("\someserver.mydomain.local\sharename\sitename\applicationName").
  This can occur if the server administrator has not authorized this
  operation for the user credentials you are using.   Learn more at:
  http://go.microsoft.com/fwlink/?LinkId=221672#ERROR_INSUFFICIENT_ACCESS_TO_SITE_FOLDER.
  Error: The error code was 0x80070005. Error: Access to the path
  '\someserver.mydomain.local\sharename\sitename\applicationName' is
  denied. Error count: 1.