I'm having a similar issue with coldfusion 10 but the suggested solution does not help me.
I now get an error that says "The system cannot find the path foo.txt"
With the failifexists="true" (the default setting), it creates the file with zero length then fails. With failifexists="false", it doesn't seem to create the file at all and just errors on filenotfound.
I am doing CF Lockdown - but the coldfusion user absolutely has change privileges to that folder.