Okay, here is the solution.
First, you’ll need to enable SSH access for the device. Open the device webpage and go to Settings | Network and turn on SSH. It will ask you to create a password. Do so.
Ok, now you’ll need an SSH client since Windows doesn’t come with one (don’t know about Mac).
Download PuTTY from here. I recommend just putting the putty.exe file into C:\Windows. Then you can access it anytime by running “putty” command.
Assuming you’ve put it where I said, go to Start | Run…
Enter putty in the run command, then enter.
Now you have the PuTTY Configuration dialog open. In the Host Name (or IP Address) field enter the name of your device. For instance WDMyCloudEX2. Or you can just put the IP address if you know it. Then press the Open button.
Now you’ll have an SSH shell open. It will ask you to logon. Use sshd for the username. Use the password you setup earlier.
Now you have a command prompt that looks like:
~ # 
Type the following command and press enter:
find /mnt/HD -type d -name .wdmc -printf “”%p"\n" | xargs -n 1 chmod o+w -R
The drive will churn away for awhile and then you’ll have the command prompt again.
What has happened is all .wdmc directories, and their subdirectories, now have write permission added for all users. By default, these directories only have write permission for the owner and the owner group.
To double check the command was executed properly, type the following command and press enter:
find /mnt/HD -type d -name transcoded_files -printf “”%p"\n" | xargs -n 1 ls -ld
You should see a listing of all the transcoded_files directories. This is the directory just under .wdmc. We are listing these directories to ensure the permission wasn’t only changed on the .wdmc directory, but also it’s subdirectories.
The list should have entries like this:
drwxrwxrwx 3 root share 4096 Nov 25 10:18 /mnt/HD/HD_a2/Public/Shared Music/Mercyful Fate/Melissa/.wdmc/transcoded_files
What we are looking for is the drwxrwxrwx portion. If it looks like that then success. If it looks like drwxrwxr-x then failure. Check the original command was type exactly as shown and try again.
Once successful close putty. Now you should be able to manipulate your folders without the root permission issue getting in the way. Unfortunately, if you add a new folder with JPG files to the drive, it will again create .wdmc subdirectories with limited permissions. So in that case run the command again if the folder needs to be manipulated.
Regarding the second issue of the thumbnail generation slowing down transfers, I suspect turning off the cloud access service before moving a large number of JPGs to the drive will solve it. However, I haven’t tested the theory yet. (Settings | General | Cloud Access = off)
A few additional notes for those who are interested and may want to take this further. I had hoped the user could simply be added to the owner group and that would fix it for all current folders and future adds.
The .wdmc directories are owned by root and the owner group is share. The directories are created with rwx permissions for both the owner and owner group, so it should be a matter of ensuring the user is a member of share and it should work fine.
However, I see the nobody user and the created user (ben in my case) are both members of share. So if windows explorer was logging into the network share using either of those users, then the .wdmc directory should be freely modified. I think that is the intention, but it isn’t working. Likely explorer is connecting to the share using some other credentials, a guest account or something. Anyway, if that was working properly then the whole issue goes away. But I don’t know enough about Unix to figure it out quickly and I need to get to work. So the above workaround will work for anyone who needs it. If someone finds a solution that works permanently please post. Otherwise, I’m sure a future firmware update will get this sorted out permanently.