Is this set in the User or Computer config? If it is in Computer, the only way I was able to get it to work was to put the file in the GPO folder itself on SysVol (did not like doing that but it works). The problem with a file on a server has something to do with the system account being used not having rights to network resources and the account isn't changable. If the local users have rights to change the file locally (mine didn't), then it may be easier to put the setting in the User Config area. Be sure to check 'Run in logged-on users security context'.
I hope this helps.
Scott


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