We had to add logic to block network and USB drives. (They were an ever-present source of customer issues.)

The root cause of the problem is that in .net, there is a bug with File.Exists. If there is a filesystem / network error, instead of getting an exception, the error is swallowed and the call just returns false. I'm not sure if newer versions of .net fix it or not; I only learned about this when we were implementing a driver / filesystem.