The path specified cannot be used at this time

Error:
While creating a new Web Application you got following error
The path specified cannot be used at this time. (Exception from HRESULT: 0x80070094)

or

When you try accessing IIS, it tells me that’s it’s not connected to any computer and prompts me to connect. When you type in the computer name it tells me that “The path specified cannot be used at this time.”

Solution:
1. Try IIS Reset.
2. Check the following KB article
http://support.microsoft.com/kb/946517