This system happens to be the AD Controller. Administrator and any other Admin users (Administrators, Domain Admins, etc) cannot change any local file or folder permissions without "Enter Network Password" - "Enter the name and password of an account with permissions for 'server'"
This popup appears just before the matching list of users in the domain comes up. All other administrators and admin users on any other computer within this domain does not have this problem..
How can I check and verify what setting or access control causes this?