You are almost certainly being redirected to the syswow64 directory due to 32 bit application on 64 bit OS. (just wasted 3 hours beating my head on the desk same issue). Per MSDN use SYSNATIVE instead of SYSTEM32.
Like:
string[] files;
if (Environment.Is64BitOperatingSystem)
{
files = Directory.GetFiles("C:\\WINDOWS\\SYSNATIVE\\GROUPPOLICY\\MACHINE");
}
else
{
files = Directory.GetFiles("C:\\WINDOWS\\SYSTEM32\\GROUPPOLICY\\MACHINE");
}
foreach (string file in files)
{
System.Console.WriteLine(file);
}