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SharePoint - Excel error... "this workbook was opened from a server in read-only mode"

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Hi,

I have a document which has unique permissions set (I gave myself contribute access to it). I do not have access anywhere else on the site. Now I try accessing the document library; I get access denied - understandably so. So I gave myself read permission on the doc lib; and then tried accessing the document - I get credentials  pop up. If I provide credentials, I keep getting it again n again. If I discard it (close the pop up) I get the file opened, but in 'Read Only' mode.

Why is this happening?

****UPDATE****

If I grant even read access on Site level; I am able to edit the file. This should not be dependent on site permissions as the file as unique permissions set and I have contribute access on it.

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