VMM Shared ISO error "User account does not have permission required to open attachment"

I had this error once because the local service account was selected during installation of VMM.  I have reinstalled VMM with a Domain service account and the error went away.  However, the error is back. 

"User account does not have permission required to open attachment '\\[servername]\VMMLibrary\server.ISO'. Error: 'General access denied error' (0x80070005). (Virtual machine ID GUID)"

I tried to create this VM on Host1 and got the error. 

I then went to Host2 and was able to create the VM while using the same ISO on the same VMM library that failed on the Host1. 

Both hosts have agent 3.2.7634.0 and are both running Hyper-V Server 2012 R2.

What is wrong with Host1 and how do I correct it?

Thank you.