Microsoft Office in a webdav or hyperlynked will open as read only. To change the default behavior and open as read-write:
Set OpenDocumentsReadWriteWhileBrowsing DWORD Value on a client machine under the key
HKEY_CURRENT_USER\Software\Microsoft\Office\<version>\Common\Internet
Set the Value data to 1.
This does not address the issue of the server service file permissions.