ClickOnce not working for customer

I'm baffled by this - myClickOnce app installs and updates perfectly (across the internet) on my development PC, but does not work on any of my client's PCs.

The only significant difference being that they use a proxy server to access the internet, but this is of course configured into IE, which I presume does impinge on ClickOnce. The proxy server does not require authentication.

The error message is pretty much always the same - and doubly confusing at that, since it seems to indicate the program folder cannot be created, and yet if I search the hard disk I can find the whole application intact (but not at the location referenced in the log).

Here's a sample:
PLATFORM VERSION INFO
Windows : 5.1.2600.131072 (Win32NT)
Common Language Runtime : 2.0.50727.42
System.Deployment.dll : 2.0.50727.42 (RTM.050727-4200)
mscorwks.dll : 2.0.50727.42 (RTM.050727-4200)
dfdll.dll : 2.0.50727.42 (RTM.050727-4200)
dfshim.dll : 2.0.50727.42 (RTM.050727-4200)

SOURCES
Deployment url : file:///C:/Documents%20and%20Settings/iajohnso/Desktop/GuruWS.application

IDENTITIES
Deployment Identity : GuruWS.application, Version=2.1.7.1, Culture=neutral, PublicKeyToken=70bce2e5dd13abbe, processorArchitecture=msil

APPLICATION SUMMARY
* Installable application.

ERROR SUMMARY
Below is a summary of the errors, details of these errors are listed later in the log.
* Activation of C:\Documents and Settings\iajohnso\Desktop\GuruWS.application resulted in exception. Following failure messages were detected:
+ Downloading file:///C:/Documents and Settings/iajohnso/Desktop/GuruWS_2_1_7_1/GuruWS.exe.manifest did not succeed.
+ Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.
+ Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.
+ Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.

COMPONENT STORE TRANSACTION FAILURE SUMMARY
No transaction error was detected.

WARNINGS
There were no warnings during this operation.

OPERATION PROGRESS STATUS
* [09/06/2006 07:05:32] : Activation of C:\Documents and Settings\iajohnso\Desktop\GuruWS.application has started.
* [09/06/2006 07:05:42] : Processing of deployment manifest has successfully completed.
* [09/06/2006 07:05:42] : Installation of the application has started.

ERROR DETAILS
Following errors were detected during this operation.
* [09/06/2006 07:05:42] System.Deployment.Application.DeploymentDownloadException (Unknown subtype)
- Downloading file:///C:/Documents and Settings/iajohnso/Desktop/GuruWS_2_1_7_1/GuruWS.exe.manifest did not succeed.
- Source: System.Deployment
- Stack trace:
at System.Deployment.Application.SystemNetDownloader.DownloadSingleFile(DownloadQueueItem next)
at System.Deployment.Application.SystemNetDownloader.DownloadAllFiles()
at System.Deployment.Application.FileDownloader.Download(SubscriptionState subState)
at System.Deployment.Application.DownloadManager.DownloadManifestAsRawFile(Uri& sourceUri, String targetPath, IDownloadNotification notification, DownloadOptions options, ServerInformation& serverInformation)
at System.Deployment.Application.DownloadManager.DownloadApplicationManifest(AssemblyManifest deploymentManifest, String targetDir, Uri deploymentUri, IDownloadNotification notification, DownloadOptions options, Uri& appSourceUri, String& appManifestPath)
at System.Deployment.Application.ApplicationActivator.DownloadApplication(SubscriptionState subState, ActivationDescription actDesc, Int64 transactionId, TempDirectory& downloadTemp)
at System.Deployment.Application.ApplicationActivator.InstallApplication(SubscriptionState subState, ActivationDescription actDesc)
at System.Deployment.Application.ApplicationActivator.PerformDeploymentActivation(Uri activationUri, Boolean isShortcut)
at System.Deployment.Application.ApplicationActivator.ActivateDeploymentWorker(Object state)
--- Inner Exception ---
System.Net.WebException
- Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.
- Source: System
- Stack trace:
at System.Net.FileWebRequest.EndGetResponse(IAsyncResult asyncResult)
at System.Net.FileWebRequest.GetResponse()
at System.Deployment.Application.SystemNetDownloader.DownloadSingleFile(DownloadQueueItem next)
--- Inner Exception ---
System.Net.WebException
- Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.
- Source: System
- Stack trace:
at System.Net.FileWebResponse..ctor(FileWebRequest request, Uri uri, FileAccess access, Boolean asyncHint)
at System.Net.FileWebRequest.WrappedGetResponseCallback(Object state)
--- Inner Exception ---
System.IO.DirectoryNotFoundException
- Could not find a part of the path 'C:\Documents and Settings\iajohnso\Desktop\GuruWS_2_1_7_1\GuruWS.exe.manifest'.
- Source: mscorlib
- Stack trace:
at System.IO.__Error.WinIOError(Int32 errorCode, String maybeFullPath)
at System.IO.FileStream.Init(String path, FileMode mode, FileAccess access, Int32 rights, Boolean useRights, FileShare share, Int32 bufferSize, FileOptions options, SECURITY_ATTRIBUTES secAttrs, String msgPath, Boolean bFromProxy)
at System.IO.FileStream..ctor(String path, FileMode mode, FileAccess access, FileShare share, Int32 bufferSize, Boolean useAsync)
at System.Net.FileWebStream..ctor(FileWebRequest request, String path, FileMode mode, FileAccess access, FileShare sharing, Int32 length, Boolean async)
at System.Net.FileWebResponse..ctor(FileWebRequest request, Uri uri, FileAccess access, Boolean asyncHint)

COMPONENT STORE TRANSACTION DETAILS
No transaction information is available.