If you are getting
ls: reading directory /cygdrive/c: No such file or directory
it’s probably because you installed Altiris Sofware Virtualization (SVS). The solution is to uninstall Altiris or use ProgramIgnoreList feature of Altiris. Read the following messages to the cygwin mailist list to know more.
Take a look to this altiris forum post also if you need more information about the issue