PowerShell error message

I just updated my Windows 2008 R2 SP1 Server with Powershell 3.0. My login script creates a substitute drive letter to a home directory on the network. So if I type Subst in the command prompt the result will be:  W:\: => P:\

Upon launching Powershell, I receive the error message: Attempting to perform the InitializeDefaultDrives operation on the 'FileSystem' provider failed.

I do not receive the error message if I launch Powershell ISE.

I also do not receive the error message if I remove the Substitution. However, it is required.

Has anyone else observed this issue? Is there a fix, besides removing the substitute drive?

Thanks

Steve