Pat -
As it is the AppServer that is moving the Data Model files from the DB to the File System, it is the AppPool Identity user that needs to have permission to read and write to the Assemblies directory as specified in Web.Config.
Have a look in the Web.Config file at the AssemblyFileSystem value. I believe that the code that writes the Data Model runs through all the Paths specified, and attempts to read the data models from each path and if they are not found, it will write the data models to the folder specified in the final Path of the AssemblyFileSystem value. I cannot recall what the 10.1.600 code did if it found the data models in anything other than the final folder of the Paths specified - throw error; delete data models; Overwrite with DB Version - but you need to ensure that the Path segments in the AssemblyFileSystem are valid and that the AppPool Identity user has at least read access to all and read/write access to the final Path folder.