visual studio .net enterprise tools: How do you delete project folders and files from TFS source control?
The delete option is greyed-out for all users including the TFS
administrators and even the setup/service accounts.

I don't know if these event log errors are possibly related:

1) SQLSERVERAGENT
SQL Server Scheduled Job 'TfsWorkItemTracking Process Identities Job'
(0xF9CE1C90B326784289C0A84FB83B7033) - Status: Failed - Invoked on:
2006-08-28 11:00:00 - Message: The job failed. Unable to determine if
the owner (GALEFORCE\tfssetup) of job TfsWorkItemTracking Process
Identities Job has server access (reason: Could not obtain information
about Windows NT group/user 'MYDOMAIN\tfssetup', error code 0x5.
[SQLSTATE 42000] (Error 15404) The statement has been terminated.
[SQLSTATE 01000] (Error 3621)).

2) TFS Services
TF53010: An unexpected condition has occurred in a Team Foundation
component. The information contained here should be made available to
your site administrative staff.
Technical Information (for the administrative staff):
Date (UTC): 8/28/2006 5:57:34 PM
Machine: VAN-TSS01
Application Domain: /LM/W3SVC/3/Root/services-1-128012614504683743
Assembly: Microsoft.TeamFoundation.Server, Version=8.0.0.0,
Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a; v2.0.50727
Process Details:
Process Name: w3wp
Process Id: 4736
Thread Id: 652
Account name: MYDOMAIN\TFSSERVICE

Detailed Message: TF50615: GSS: There was a failure reading group
membership from Active Directory. No action is required, and another
method to read group membership will be used.
Exception Message: Unknown error (0x80005000) (type COMException)

Exception Stack Trace: at
System.DirectoryServices.DirectoryEntry.Bind(Boolean throwIfFail)
at System.DirectoryServices.DirectoryEntry.Bind()
at System.DirectoryServices.DirectoryEntry.get_SchemaClassName()
at
Microsoft.TeamFoundation.Server.IdentityStoreAccessor.GetGroupMemberProperties(DirectoryEntry
group, Dictionary`2 memberSidTable, Dictionary`2 memberDNTable)