I have been trying to solve this for hours on end, without success. I can share a folder via HomeGroup on my Windows 8 Professional x64 laptop and I am able to access the folder on my Windows 7 x86 Starter netbook, but not the other way round, meaning I get the same errorcode 0x80070035 each time I try to access the Windows 7 machine on the Windows 8 machine. I have enabled NetBIOS via TCP/IP on both machines, verified that the name of the workgroup is the same on both machines, tried to enable / disable password protected sharing, verified that services are running, rebooted both machines on several occasions, went out the door for a gasp of fresh air and still haven't been able to find the culprit.
There's no antivirus / firewall suite running on either machine (apart from Windows firewall). There is no router in between, just a normal switch. I am running Mouse without Borders (from Microsoft Garage) since Windows 8 has rendered Input Director useless, and I am able to move my mouse pointer across the screen of the Windows 8 machine using the touchpad of the Windows 7 machine (and I can even copy bits of text from the Windows 7 machine to the Windows 8 machine via the shared Windows clipboard) so it's not like everything gets blocked by the Windows 8 machine.