The scratchDir you specified: C:\Windows\system32\........... is unusable.
Looks rather simple; You are not allowed to create or write into this
directory.
Quick check: Please start Geoserver as an administrator. I suspect it would
work.
Please note: There is a difference in Windows7/8 of BEING an administrator
and RUNNING a program as an administrator.
My general recommendation would be: Do not deploy in the 'Program Files ' or
P...(x86)' directory, pull the data directory out of the program and put it
somewhere else without write protection, avoid the use of user or system
directories for anything (logging, properties etc.) as they are
write-protected as well.
Cheers
Christian
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____________________________
Dr Christian Maul
Project Manager
Information Services Branch
Department Environment and Primary Industries
Level13, Marland House, 570 Bourke Street
Melbourne 3000