After doing some more testing there is one way it does not work still. When Nginx runs on windows it runs under your user account. For example my account name is root.

So it says nginx is running under the root user.
But when i restart the server(local machine) it says nginx is running under the SYSTEM user and that is when all files other than plain text give of a 404 not found error.

Its a interesting issue maybe the SYSTEM user group in windows does not have access to the mapped hard drives ?