Of course my setting for "Launch folder windows in a separate process" was already disabled. But get this, I enabled it, then disabled it and now it works.
Ok, this issue just started two days ago for some unknown reason. No one really messes with the computers other than me and I haven't touched this laptop in a while. In fact, the last time was when the paralegal mistakenly hit "yes" on the Windows 8.1 update
annoying popup. Before it completed she told me so I successfully DID NOT accept the EULA and it rolled back the changes. That only stole an hour from our day.
So evidently now the hidden, cached image from the preview pane prevents deletion of a file. When I switched the view option now the preview pane says No preview available.
C'mon Microsoft, stop messing around!