Hi,
Above all, for the step 2, whether the "copy" is finished with copy NTFS permission with files/folders?
If not, let's redo the steps:
1. Stop DFS-R service on target server
2. Use Robocopy to correct permissions on Drive E:
Robocopy d:\folder E:\folder /secfix
/SECFIX :: FIX file SECurity on all files, even skipped files.
Note: For files which are not changed, it will not copy again.
3. Adjust target replication folders to E drive in DFS management
4. Enable the DFS-R service
It will still initial a replication but should be finished quickly as files are already exists in target folder.
For detailed instruction of "pre-staging" please refer to:
http://blogs.technet.com/b/askds/archive/2008/02/12/get-out-and-push-getting-the-most-out-of-dfsr-pre-staging.aspx
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