Have you tried booting a live CD or DVD of your distro and then deleting the
obsolete home directory? If you are using Wubi this probably won't work
though as the ubuntu installation will appear as one huge file.

Yeah, it's a Wubi installation. I don't have any CD or DVD to boot from.

Did you already copy off to CD/DVD or USB what you wanted to keep from your home
directory? Did you delete logs to gain some space? Did you delete your Web
browser history whether Chromium or Firefox?
Sorry, but I back-up and re-install before this ever happens to me. Plus, I
know I could image to a bigger hard drive if necessary.

Try typing the following in a terminal

sudo rm -rf /home.backup


Enter your logon password when prompted - but *take care*. The command
you are issuing is *very* powerful and could, if you make any typos,
wreck your filesystem.

If you want more information, type 'man rm' in a terminal (hitting Q
will get you back out).

Before anything else, list out the files and directories with the long format so
you can see permissions. Also list hidden files. There may be an extended bit
set or a hidden file within the directory with 000 permissions. Also there is
an extended bit called Sticky bit.