Setting up new SCCM Configmgr Current Branch 1606 in production environment .As part of it ,have created source folder (repository for content store) and placed couple of packages/applications for testing . while trying to distribute the packages, all failed with same error code.
The source directory \\servername\sources$\Applications\Microsoft\SCUPCert doesn't exist or the SMS service cannot access it, Win32 last error = 5
Win32 last error = 5 translates to access denied .I made sure ,SCCM site Server account, user account /group had full access to the source folder location but missed to add System account.
To see if the system account have enough read permission to the above share ,simply use sysinternal tools and access the share if that works or not.
PSEXEC -i -s -d CMD
In my case ,it says access denied but am able to access using user account.
To fix this ,you need to provide permissions to SYSTEM account as well both in sharing and security tabs (NTFS Sharing).
Hope it helps!